Navigating Uncertainty in Global Construction: Key Insights
Understanding the Future of Global Construction
Currie & Brown launches Construction Certainty Index to help organisations navigate rising volatility
Recently, significant concerns have emerged regarding the global construction industry, forecasting a staggering loss of $2.5 trillion in construction activity due to ongoing uncertainty. This projection highlights the vulnerabilities present within this crucial sector, echoing observations akin to the GDP of entire nations. The insights are drawn from a comprehensive study by Currie & Brown, a renowned leader in cost management, project management, and advisory services.
The Impact of Uncertainty
The report titled "Building certainty in an era of relentless change" surveyed over 1,000 decision-makers globally, each responsible for managing construction pipelines averaging an impressive $12.9 billion.
The findings revealed that on average, organisations reported a staggering 13.7% financial loss in their project pipelines over the last year, translating to an average impact of approximately $2.1 billion per organisation. Alarmingly, nearly one-third of projects experienced descoping, delays, or outright cancellations. Alarmingly, only 20% of industry leaders expressed full confidence in their ability to remain within budget.
Identifying Major Risks
The primary risks susceptible to magnifying this uncertainty encompass several factors: escalating material costs, volatile energy prices, supply chain disruptions, and ongoing labour shortages. Each of these issues is anticipated to heighten, further complicating the landscape for construction professionals.
Dr Alan Manuel, Group Chief Executive Officer at Currie & Brown, emphasizes this sentiment: "Persistent uncertainty has become a new norm within the construction industry. While external factors like rising costs and political instability contribute significantly, fundamental systemic issues are equally critical. Outdated procurement methods, misaligned objectives, and incomplete designs are rising concerns. It is essential to address these challenges rapidly, as the construction sector serves as a backbone for economies and plays a vital role in enhancing quality of life. This industry is crucial for progress and cannot afford to lag behind."
Introducing the Construction Certainty Index
In response to these prevailing uncertainties, Currie & Brown has adeptly introduced the Construction Certainty Index. This innovative tool aims to gauge forward-looking confidence and assess the impact of various risks on global construction projects.
This index serves as a valuable asset for organisations, helping them understand their current standings and identify necessary actions moving forward. While no singular solution exists, the report highlights four interconnected areas that can help build resilience in the industry:
Key Areas for Resilience
- Technology: Leverage technology with intention rather than as a quick solution.
- Data: Emphasize quality insights over sheer quantity of data.
- People: Foster long-term partnerships and plan skill development early.
- Mindset: Cultivate an agile and adaptable approach while proactively managing risks.
The report also delivers a resounding call to action, emphasizing the necessity of collaborative efforts. The construction industry cannot navigate these complexities alone; addressing systemic uncertainties will require cooperation from governments, asset owners, and project delivery partners worldwide.
About Currie & Brown
Currie & Brown stands out as a top-tier provider of project management, cost management, and advisory services, dedicated to helping clients achieve certainty across various sectors throughout the project lifecycles.
Frequently Asked Questions
What does the Construction Certainty Index measure?
The Construction Certainty Index measures confidence levels and assesses the impact of risks on global construction projects.
Why is uncertainty affecting the construction industry?
Uncertainty is largely driven by rising costs, geopolitical shifts, supply chain issues, and systemic inefficiencies that undermine project stability.
What are some of the major risks identified in the study?
The major risks include material cost inflation, volatile energy prices, workforce shortages, and disruptions in supply chains.
How does Currie & Brown aim to address these challenges?
Currie & Brown aims to address these challenges through their Construction Certainty Index, which encourages proactive measures and collaboration.
What role does technology play in the construction sector?
Technology plays a critical role in enhancing project efficiencies, improving planning, and mitigating risks when adopted thoughtfully and strategically.
About The Author
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