AESG predicts “the perfect storm” for the building sector

AESG’s Saeed Al Abbar shares why we need to “radically transform” how we develop buildings to meet decarbonisation targets

AESG managing director Saeed Al Abbar shares his thoughts with Construction Week
ITP Media Group
AESG managing director Saeed Al Abbar shares his thoughts with Construction Week

I was recently asked to share my views on what the built environment would look like in 2030 as part of the World Green Building Council’s MENA Green Building Congress.

Whilst it is impossible to predict the future, it is clear that the sector is set to go through its greatest transformation since the technological revolution of the late 1800’s that spurred the boom in high rise construction.

So why is this so? When you look at the components that have sparked major transformations to a sector it effectively boils down to 2 factors; the necessity and the means.

If I look at the building and construction sector today, never before have these two forces been as prevalent and I would even go so far as to say the ingredients are in place for a ‘perfect storm’.

Economic Necessity

Whilst it may not feel like it amidst the economic turmoil in the sector, the current demand for construction globally is unprecedented.

We are currently going through the largest wave of urban growth in human history and we expect to add almost 2.5 trillion sq ft of floor area to the global building stock by 2060, effectively doubling it, and building the equivalent floor area of Paris every week.

Alongside this however, the sector is crippled with a productivity crisis. Construction lags significantly behind the rest of the economy in productivity growth.

Between 1997 to 2017, productivity growth in manufacturing eclipsed construction by a factor of six.  For those working in the sector this probably does not come as a surprise.

Our techniques to build have largely remained unchanged in decades with very little capitalisation of technology breakthroughs.

This really is its own topic for another day but in my opinion, we will not change this until we fundamentally break down and rebuild our current approach to project delivery which I can best describe through the lens of the manufacturing sector as;

‘A team of over 100 different firms that have never worked together all with competing commercial motivations trying to deliver a one-off prototype where the majority of components are non-standardised and at the end of the exercise everyone disbands and never works together again and the prototype is never produced again’.

This in my view is the fundamental root cause of the economic crisis that we are facing in the sector.

Clients are in essence unwilling to pay a high price for wastefulness and inefficiency, driving margins down to decimals of a percent and ultimately resulting in the liquidations and bankruptcies the sector has experienced in recent years.

The world needs us to build at an unprecedented rate so we need to address our productivity and economic glitches so we can deliver a high-quality built environment in a resource efficient manner.

Climate Necessity

Many experts believe that the current tragic crisis we are facing with the health pandemic would be a mere pre-cursor to the looming climate crisis that we would face if we do not heed the call to decarbonise the global economy and transition to a 1.5degC warming scenario.

With buildings accounting for the highest portion of global emissions by sector, we really are front and centre in this fight.

The World Green Building Council has put this simply.  We need to totally decarbonise the building sector by 2050, which needs all new buildings to operate at net zero carbon by 2030.

When you look at the development cycle of a typical building from inception, feasibility, design, financing and delivery it is generally at least a five-year cycle.

We basically need to radically transform the way we develop buildings within the next 4 or 5 years.

Looking at the current pace of change of the sector and the relatively nominal improvements that have been made at a sector level towards decarbonisation, the next few years really need to be transformational.

The Means

Whilst I paint a fairly gloomy backdrop, I am also confident that we have the means as a sector to emerge out of the current COVID-19 crisis in the right shape to make radical productivity gains and take major leaps towards decarbonisation of the sector. 

To me, the productivity crisis and climate crisis that need to be overcome by the building sector are intrinsically linked.

We need to rewire our systems, approaches and techniques to enable us to deliver net zero carbon buildings at double the productivity of our current traditional practices.

With advancements in modular construction and major technology players entering the space, the sector is primed for a positive disruption.

However, this needs us to break down our current systems and assumptions and embrace change.

As a sector, we have been remarkably successful at resisting change and this has unfortunately driven the industry’s best talent to other sectors as the best minds are never content with just maintaining the status quo.

The current global crisis is an opportunity for us to rebuild better and truly advance this crucial sector.  If not now when?

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