European Construction and Infrastructure Roundtable
We were delighted to welcome participants to the annual EY European Construction and Infrastructure Roundtable — now in its 15th consecutive year — at our London office on 15 November 2016. Hosted by Ad Buisman, EY Global Construction and Engineering Leader, the day included a lively mix of presentations, panel discussions, and questions and debate from the floor.
The following are some of the highlights from the event.
Discussion points to consider
- While the post-Brexit environment might seem like business as usual, it’s early days and that impression might be deceptive.
- The main risks for the industry arising from Brexit are skills, shortages of labor, access to resources, cost inflation, foreign direct investment attractiveness and the loss of EU funds.
- Disruptive technologies are changing products, changing production, and changing demand, whether through the cloud, the Internet of Things, augmented reality or virtual reality. This is creating a new competitive landscape in which disruptive technologies will be available to anyone — there will be low barriers to entry.
- The biggest challenge, besides low margins, is the lack of skilled labor in the sector. And in the UK, post-Brexit immigration changes are likely to make that challenge greater.
- Other trends in the post-Brexit environment include optimism that innovation will help improve margins within the industry; that international expansion and consolidation of the supply chain are still high on the agenda; and that design and construction should work more in partnership.
- There is a business case for corporate responsibility, and potentially a competitive advantage, so companies should “be good and tell.” If the sector doesn’t do it itself, then government will.
- The UK’s £400 billion (€466 billion) investment program is going to bring many opportunities to the construction industry. But the number of megaprojects in the pipeline will bring challenges — how is the industry going to deal with them?
- Questions about UK and European companies’ balance sheets, the lack of investment-grade credit ratings, and how risk can and should be shared between parties in the sector are clearly hot topics for the construction industry.