A New York-based global management consulting firm is suggesting that the recent slow-down, and in some cases abrupt halt, of business prompted by the COVID-19 outbreak could be a good thing for the construction industry.
In its How Construction Can Emerge Stronger After Coronavirus, the McKinsey & Company report notes that many construction firms emerged from the Great Recession stronger because they “typically moved fast and hard on productivity, including cost reduction.”
Those firms also reallocated resources and swiftly made major decisions regarding both acquisitions as well as divestitures. Many of those same companies also diversified their workload, and invested heavily in digital technologies.
Those technologies include Building Information Modeling, with the report noting that today’s current industry downtime might provide the best opportunity to train staff on how to use such high-tech devices.
“Organizations must think through the moves they can make today to come out ahead later,” the report says.
More specifically, the report suggests that construction firms soberly appraise their current general business and workforce outlook, while looking in particular at near-term cash management challenges.
Companies should also create a detailed plan for a return to a more normal business environment once the COVID-19 situation evolves, while also imaging the “next normal,” which includes what a new industry and market shift may look like.
Finally, the report suggests that firms should be “clear about how regulatory and competitive environments in the industry may shift.”
Based on data provided by the McKinsey Global Institute, the report notes that while most of the nation’s economic activity could be back on track sometime early next year, the buoyancy of 2019 may not be revisited for another three years.
By Garry Boulard
Get stories like these right to your inbox. Sign up for our newsletter