2020 engineering and construction industry outlook
Exploring engineering and construction industry trends
In 2019, the engineering and construction industry saw overall market growth despite cost pressures, labor shortages, and trends toward fixed-bid projects, which are likely to persist in the future. In 2020, the industry will focus on mitigating these challenges while capitalizing on trends that help improve operations and deliver a competitive advantage.
Growth prospects for engineering and construction firms remain upbeat
The engineering and construction (E&C) industry has had a robust year, and E&C firms have been positioned as active participants in building the smart, connected future. Overall market growth is expected to continue through 2019 as construction spending follows the overall GDP growth rate. While firm revenues are steadily rising, the bottom lines are still under considerable pressure. Among the challenges the industry faces are sustained cost pressures, ongoing labor shortages that affect productivity, and trends toward fixed-bid projects that often demand a level of pricing and operations precision that is difficult to obtain with traditional systems. While the industry still trails broader digital adoption maturity,1 the continued adoption of digital technologies could alleviate some of these issues. It can also present additional hurdles in terms of successful implementations and upskilling the workforce to absorb the technologies.
Despite these challenges, E&C firms are poised to potentially benefit from several significant opportunities in the industry: the US transportation and infrastructure upgrade initiative and the rise of smart city mega-projects, to name two. To remain competitive, industry leaders will likely continue to define a new vision and map a comprehensive digital blueprint to realign their business and operational processes to reflect the opportunities that innovation and technology provide. And a persistent theme throughout all of this is the value of partnerships within and across the ecosystems in which these firms coexist.
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2020 engineering and construction industry trends
2020: New opportunities indicate a dynamic year ahead
Given the opportunities and potential challenges that are facing the E&C industry, the year ahead promises to be dynamic. As several major trends play out at the national and global levels, including infrastructure upgrades and smart city initiatives, E&C firms have opportunities to play central roles. However, sustained cost pressures will not evaporate and trade uncertainties persist; therefore, firms should consider how to mitigate some of these challenges. Building a solid digital roadmap can help with operational challenges while also delivering competitive advantage for the early adopters.
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