Construction Chain expects to invest R$ 2.7 trillion in projects in Brazil by 2030

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The three sectors which constitute the construction chain (infrastructure, basic infra structure & civil works, and real estate development) should have a total investment of around R$ 2.7 trillion by 2030, according to the study on Productivity and Opportunities for the Civil Construction Chain, conducted by Deloitte and published by the Brazilian Association of Real Estate Development Companies (ABRAINC). The study also highlights some of the main developments in the sector’s production chain, which is composed of 23 thousand companies that generate R$ 443 billion in taxes, and how it should be expanded in the coming years. According to this study, new investments will be built around an interface more focused on new technologies and sustainable practices, and its first signs are already becoming apparent. Currently, 38% of the companies in the construction and development sectors are investing in partnerships with startups, and 83% of them are working with constructechs (startups providing solutions for the civil construction sector). As a result, companies in the sector should increase their investment in technology by 10%. In addition, the study shows an increase in the level of education of construction professionals. For example, the number of illiterate people working in construction is 1.1% compared to 1.7% in 2007. What’s more, the number of construction professionals with a high school education soared from 14.7% in 2007 to 40.6% in 2020. Those holding a university degree increased from 4.3% in 2007 to 6.8%. In order to maintain productivity gains and promote new investments, the sector must expand the adoption of methods and parameters used to measure its efficiency gains and the time required to carry out its activities. According to Luiz França, President of ABRAINC, the Deloitte report develops tools to evaluate the efficiency and productivity of projects in this sector. He recalls that real estate development and civil construction involve multiple production processes, and measuring their performance requires understanding the factors which affect the sector. Given this scenario, it is possible to seek improvements and specific investments, making the sector increasingly agile and assertive.

“This study is a way to understand more about the productivity of such sector, to measure new indicators. It is a valuable piece of work for real estate development and construction because the exchange of information and the communication between all the links joining us is a way to increase competitiveness and provide quality services” he says. The document also adds important data on the innovation, quality and sustainability of projects. And it highlights how the sector should behave in the digital and regulatory environments. Giovanni Cordeiro, Director of Research and Intelligence at Deloitte, believes that the study on Productivity and Opportunities for the Civil Construction Chain makes it possible to predict the behavior of the construction production chain in the coming years, including the level of investments. He also points out that the sector is increasingly at the forefront of technology. “In recent years, great progress has been registered in the technological field, through the search for partnerships with technology companies, such as startups and constructechs”.

Efficiency and productivity at issue

Institutions in the globalized world seek to acquire skills and advantages that allow them to overcome the ferocity of their consumers’ needs. Imagine, then, when this need is related to having the first property or a new property. In this context, efficiency is a fundamental factor for an industry to remain operating in the market. One of the most required aspects in the civil construction industry is labor efficiency, which is, as in other segments, a very challenging issue. The execution of works and activities, in four out of five surveyed sectors of this industry (construction, development, construction-related services, trading and building materials industry) requires even more qualified professionals. Engineering and construction companies and owners are constantly striving to implement and integrate Industry 4.0 technologies to make data analytics-driven decisions, improve dynamic scheduling, and reduce budget and schedule variances. These technologies range from building information management (BIM) and digital twins to remote project monitoring using sensors and drones. A study carried out by ABRAINC shows that six out of ten real estate development companies already use the Building Information Modeling (BIM) methodology in their projects. The survey was conducted among directors, coordinators and superintendents from 60 members of the association. BIM is a technology which allows everyone involved in the planning and construction of a project to review changes to the project in near real time. It also allows for collaborative work by integrating data from different areas. In other words, it integrates architects, material suppliers and even the engineering department. Overall, 61.6% of the real estate development companies that responded to the survey coordinate their work on the BIM platform. These are companies that are already working with the 3D methodology, which allows a digital model of the project to be created, making it possible to carry out checks in the early stages of construction that would otherwise only be carried out in the execution phase. According to the President of ABRAINC, Luiz França, the use of new technologies and techniques in construction management is applied in all phases of a project, from the feasibility study, planning, construction budget, execution, maintenance to follow-up actions. “More and more real estate development companies are aiming to improve the quality of their projects with their teams. The construction industry continues to innovate, to follow the cutting edge of technology and to optimize productivity on the construction site, in addition to providing several benefits, such as reducing the number of errors and costs”, he points out. These drivers are needed to encourage and incorporate changes in leadership, project teams, and the way projects are managed and executed. The transformation of project controls has historically been focused on solving technical controls developed from operational expertise, rather than being structured in a management that considers more appropriate methodologies to the situation, empowering people and defining processes.

76% of engineering and construction executives say they are investing in digital technologies to help them address a broader range of cost and margin challenges

24% are investing in drones and robotics in the workplace to increase labor productivity and efficiency

80% expect to increase investment in technology by up to 10% in the 2022-2023 period

Partnerships with startups bring technological leap to the industry

In recent years, startups have emerged as a way to help companies in the construction chain become part of a broader ecosystem, connected to diverse business sectors and related to other industries, such as financial services and technology. In real estate development, there are also constructechs, the category of startups with which companies in the construction chain establish partnerships, followed by startups in the financial sector called fintech. The high number of startups from different sectors working in partnership with companies in this chain shows that there is a range of diversity and opportunities to be explored in terms of partnerships between companies from the industrial and construction sectors and those from other sectors. Last year, with the aim of promoting new businesses and presenting innovative solutions, the Brazilian Association of Real Estate Development Companies (ABRAINC) held Match de Inovação [Innovation Meeting] with 26 startups and real estate development companies with one-on-one meetings taking place in business rounds during the Leadership and Innovation Forum (FILI 2022). These meetings between a company/startup operating in the construtech, fintech and martech segments generated networking with companies in the construction sector and representatives of real estate development companies which are members of ABRAINC. More than 150 meetings were held to identify the main needs of the real estate development and construction sector. The President of ABRAINC, Luiz França, considers as promising the engagement of several representatives of the civil construction sector to attract new investments and strengthen the production chain. “Match da Inovação was an important mechanism created by ABRAINC to strengthen the relationship among suppliers of the civil construction production chain and generate new business opportunities for all those taking part of it” he pointed out.