Success factors in the construction industry

Industry radar – Findings of the trend survey

The slump in the construction industry is coming to an end, according to Germany's largest construction companies. Most companies expect more favorable market conditions in the next few years, particularly due to increasing investment by the private sector. These are the key findings of the survey conducted by Roland Berger Strategy Consultants on success factors in the German construction industry in 2004. The survey reveals that many companies are currently developing more strategic methods, such as innovations, to sustainably increase earnings. In addition, the companies surveyed intend to expand risk management and employee development.

Outlook for the German construction industry: Comparison and importance of success factors for the future

• The decline in the German construction industry is now entering its ninth year. EU enlargement is creating an increase in supply, while the sustained recession and empty public coffers are causing a drop in demand
• Companies in the construction industry are thus facing new and varied challenges: What success factors do they need to take to heart in the future, how can they differentiate themselves from their competitors and what issues do they need to address?
• To find the answers to these questions, the Construction Practice Group at Roland Berger Strategy Consultants conducted a Europe-wide study of the success factors in the construction industry in 2003. Due to the positive response, the study was updated and expanded for the German construction market in 2004
• The key questions are:
  Which factors will determine success and failure in the future?
  In what areas is action urgently needed?
• From February to March 2004, questionnaires were sent to managers of the 30 largest (sales of EUR 200 m to EUR 12 bn) – the above-average return rate of around 50% shows that there is significant interest in this issue
• Once again, the participants assessed past and future conditions, as well as success factors and the extent to which they have been achieved. In addition, the current study examines in greater detail those success factors that were deemed particularly important in the 2003 study
• The survey findings make it possible to compare the development of conditions and success factors in Germany and to point out where action is needed in the industry.