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Construction projects are becoming ever more complex

The impact of the construction boom – and how companies should best respond. An interview with PwC expert Dr Martin Nicklis.

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Construction projects are becoming ever more complex

The impact of the construction boom – and how companies should best respond. An interview with PwC expert Dr Martin Nicklis.

Reading time [2 Min]

Dr. Martin Nicklis

has been engaged as an expert in construction engineering at consulting company PwC Germany for over 28 years. He advises construction companies of any size – from SMEs up to the Dax Group.

Dr Nicklis, what are the consequences of such strong economic activity in the construction sector?

Nicklis Many construction companies have long order pipelines they really need to tackle now. Very popular companies only select those jobs they can reliably and profitably complete. I assume this situation will continue for the next two years – even if overall economic growth is decreasing.

Which factors are favouring the order situation?

Nicklis There are two mega trends behind the construction boom: urbanisation and globalisation. The growth of urban agglomerations creates a huge demand for new homes, offices and infrastructure. The trend toward mega cities continues unabated, especially in Asia and South America. China will have cities with more than 100 million inhabitants by 2050.  At the same time, globalisation of the economy means that production facilities are being built in remote regions of the world where this would never have been expected.

Construction projects are becoming ever more complex. Many large projects take years to complete. What are the means by which the construction industry can solve such problems?

Nicklis The most important instrument for getting a better grip on construction projects is building information modelling (BIM). It enables the virtual representation of all the processes in a construction project, from planning and construction to building and facility management. The building already exists as a virtual 3D model before the foundation stone is laid. The various project partners use software to dock with this model and add their data. So all steps can be planned and implemented in a timely and cost-efficient manner. Large public clients no longer award projects without BIM.

What other challenges posed by the boom does the construction industry have to overcome?

Nicklis The shortage of labour creates substantial capacity problems. Many companies are crying out for qualified personnel, such as energy specialists, machine operators and construction workers. The most important construction resources are also scarce. Sand as a common commodity is a highly sought-after raw material, because it's needed to produce concrete. Sand prices are rising and the removal of entire beaches is resulting in serious environmental damage. That's why the sector is developing new composite materials that can replace conventional concrete.