Continued uncertainty on recovery timelines and the risk of virus resurgence could drive an additional wave of bankruptcies among smaller players, further accelerating the trend toward industry consolidation. Construction tech players have been forced to lay off employees and cut costs to manage cash flow. Many contractors are seeing shrinking backlogs and more competitive bidding environments, which have analogously impacted the construction tech industry. While there has already been a rapid increase in collaboration technology uptake, the pandemic has also triggered a painful shakeout. By necessity, contractors, architects, engineers, and suppliers have quickly shifted to working and collaborating digitally-from video-call site meetings to filling digital orders. Top construction companies were already investing heavily in technology prepandemic. Indeed, the bulk of short- and long-term pandemic-driven construction industry issues will be solved with technology. As thousands of health professionals heroically battle the COVID-19 virus, construction industry leaders are also charting a path toward keeping their employees, contractors, and end users safe. The continuing pandemic has also had an impact on the construction technology industry. There are significant opportunities to create value for both strategic and financial investors that are evaluating consolidation plays. As the global COVID-19 pandemic forces many construction players to digitize and use technology to ensure the safety of their workers and boost productivity, this dynamic will likely only continue to accelerate. While the construction technology industry is still filled with players offering point solutions or limited suites, our latest annual effort to map and understand the construction technology landscape reveals that the industry is moving toward platforms and predicts that a combination of multiple platforms will coexist in the space. Mullin, and Maria João Ribeirinho, representing views from McKinsey’s Private Equity & Principal Investors and Engineering Construction & Building Materials practices.
This article was a collaborative effort by Katy Bartlett, Jose Luis Blanco, Brendan Fitzgerald, Josh Johnson, Andrew L.
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