In the construction sector, we have been reflecting for months on what the future will be like after the Covid-19 pandemic. We still do not see the end of a situation so anomalous that it has accelerated trends that were already underway. We, too, have been analyzing the future of the sector for some time and, after our publication ‘The day after -Impact of Covid-19 in the construction sector’, which we published in the midst of the first wave of the pandemic, it is time to reassess the situation. Without a doubt, our environment has changed dramatically in the last two years, something to which the infrastructure market is no stranger. Although we are facing an environment in constant transformation and with high uncertainty about the future, today
We know that we want infrastructures that are more in line with our needs, more flexible and more sustainable. The construction sector accounts for around 12.5% of Spain’s GDP and employs more than 1.3 million people in Spain. Due precisely to this weight in our economy, the sector has had to overcome multiple impacts on its operations and market structure, as well as overcome significant financial difficulties. The rising cost of raw materials, which has led to an increase in construction costs of more than 13% in the residential sector, for example, has also become a headache for the sector, which expects a stabilization of the prices throughout the next year. Likewise, the lack of qualified workforce has been another of the main concerns for companies for some time. To overcome these challenges, trends such as industrialization or digitization are emerging as solutions to the main challenges of a sector that assumes very high risks to execute projects in which it barely achieves margins of 5% on average. It seems that the future will be marked by the use of elements and processes that include circularity and a more efficient use of resources.
Along these lines, it should be noted that the sector has been able to demonstrate its resilience, which was put to the test by the strong global financial crisis of 2008, showing that it is a fundamental sector for our country. We have leading construction companies in the world capable of participating in the main infrastructure tenders on a global scale. There is no doubt that an exciting 2022 awaits us. Although the construction industry may seem too big to move with agility, it should be noted that it is adapting flexibly. The NextGenerationEU Funds open more opportunities to a key sector in the economy, as well as decisive to consolidate a true transformation at all levels.
Fernando Gonzalez Cuervo is partner responsible for the construction and infrastructure sector of EY