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Digitize to gain competitive edge, Philippine construction firms told

Updated: Jul 26, 2022

Procore Technologies, Inc. participates in the Philconstruct Visayas Hybrid Edition at the Waterfront Cebu City Hotel in July 2022. (IDC/Ventures Cebu)

Now that construction activities have fully resumed following two years of pandemic-driven slump, local contractors and developers would do well to digitize operations and make sure their teams are connected to be able to gain a competitive edge.

Companies that are more forward-looking and able to digitize operations faster will likely score the bigger and more complex projects in a booming post-lockdown economy, NYSE-listed software company Procore Technologies, Inc. said.

These companies will also attract better employees, according to Procore account director for Asia Kin Weng Tan.

Tan made the call in a forum during the Philconstruct Visayas Hybrid Edition on July 21, 2022 in Cebu City.

The Philippine construction industry, a massive $54.5 billion (roughly P3 trillion) market, is predicted to continue its impressive performance in the coming years as the new government continues the previous administration’s infrastructure program.

Data analytics firm GlobalData Plc said the Philippine construction industry grew by 10.6% in 2021, a strong rebound from the 30.3% pandemic-driven contraction in 2020. The residential and commercial segments led the top performers.

Market research store Research and Markets predicts a 21.8% industry growth for 2022 and an average annual growth of 7.5% for the succeeding years through 2026.

Cebu projects

Cebu is seen to follow the same growth trajectory despite having suffered the double whammy of the COVID-19 pandemic and the destructive Typhoon Odette.

“So many projects coming up, so many developments coming up. We have Manila and local developers who are so eager to develop more projects here,” Cebu Contractors Association, Inc. director Rizalito S. Casinillo said in the same forum.

Among the projects he cited were the airport projects in Bogo City and Camotes Islands, the Metro Cebu Expressway (circumferential road), and the new container port. He also cited the various residential and commercial construction projects by the private sector, led by the multibillion-peso Carbon Market redevelopment project.

Like the rest of the world, however, Cebu is also being hammered by volatile fuel prices, high prices of construction materials, and pandemic-driven supply chain disruptions.

Tan said these problems, as well as the prevailing labor shortage, are global.

“It’s now more important than ever to be able to connect ourselves and figure out how we can solve these together,” he said.

Exciting times

“Actually, these are very exciting times, which is why I’m also here in this industry. There’s going to be a lot of tremendous growth as economies have to recover. And one of the ways that the government will help to incentivize and spur the economy is through construction,” Tan said.

Based on a McKinsey report, the engineering and construction industry is the second least digitized industry.

Tan said the countries that can digitize the construction industry faster generally tend to perform and build better and faster.

Asked if he sees the Philippines as a growth area, he said, “Most definitely…the economy is reopening and there are a lot of infrastructure projects. We’re talking to a lot of developers and contractors, and all of them are very optimistic about what is to come in the Philippines,” he said.

He said Cebu and the rest of the Philippines should be able to build faster and build more complex structures like data centers in the coming years.

“I’m very excited and look forward to how we’re going to work together to see the Philippines grow,” he said.

Procore Platform

Procore, which is headquartered in California (US), has been doing business with companies in the Philippines, although it was only recently that the company opened an office in Singapore to focus on expanding operations in Asia.

Procore is offering a construction management system that gives construction companies better control over communication, collaboration and data management throughout an entire project.

In a white paper, three of four Procore users surveyed said construction tool Procore Platform has helped reduce the amount of rework on projects and saved an average of 15 days per project.

Procore connects all stakeholders across a single platform and provides everyone access to the same real-time data and actionable insights into all aspects of project performance direct from the job site.

By staying ahead of compliance and keeping all stakeholders accountable, Procore also enables better control of projects to deliver smarter construction.

“At Procore, we believe that the future of construction lies in smarter construction — where data become a competitive differentiator for companies,” Tan said.

“The company that digitizes and gains the efficiency and the lessons learned from the data will have a high competitive advantage in the business,” he added. (MVI/Ventures Cebu)

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