Construction Sector in Post-Pandemic
COVID-19 has caused global disruption across most industries, with the construction sector being particularly hard hit. And with a growing focus on environmental, social and governance (ESG), and decarbonisation means construction contractors may soon find themselves being challenged if they don’t rapidly adapt to meet changing government and consumer requirements.
While penalties are not in place yet, according to the UK Government body, Department for Business, Energy and Industrial Strategy, they may be imminent.
The problem for many is that they are already operating on razor-thin margins, even at the tender award stage. With added build requirements meaning the use of lower carbon materials, which are, of course, more expensive to procure, there is even more pressure on the bottom line than before.
Most companies in the construction sector—although mainly the main contractors—already have programmes to substantially cut costs. But here’s the main challenge – the cost cutting is either not severe enough or the pace of change is too slow to deliver the required returns to satisfy the stakeholders.
By stakeholders, we primarily mean shareholders, who have been mostly patient waiting for their returns – but patience is running out!
Full Article can be found at https://unravel.ink/six-post-pandemic-margin-creation-opportunities-for-construction/