The Construction Risk Index analyzes the severity of impact and ease of management of the top 50 risks facing the construction industry. We have grouped risks into five megatrends to best examine how they impact the sector currently and how that impact may change over the next decade.
The research is based on quantitative data and qualitative interviews with some of the world’s leading construction companies around the globe, with an emphasis on six geographic regions.
The findings show that the biggest challenges to the success of construction companies and their projects are heavily influenced by political stability and economic climates. Yet the study reflects an underlying optimism at a crucial time, when technology and talent are poised to transform the industry and deliver efficiencies that have been sought for decades. Some of the key themes to emerge from the research are:
The industry's top threats as seen through the eyes of senior executives
The most prominent concern for construction executives is geopolitical instability and the resulting changes across the globe. Of greatest concern among construction companies: undesirable changes to government financing, policies and priorities.
The construction industry can be only as effective as its workforce. The study shows that structural challenges related to the workforce, complex contracting decisions and a physically dispersed labor pool add to the inherent difficulties of managing people.
The study also shows concerns over increasing competition, access to funding and macroeconomic uncertainty. These factors are forcing construction executives to diversify their business models and operations. Construction executives are finding that they will have to deal with changes that sit outside the boundaries of the industry.
The huge growth in emerging technologies has the potential to transform the way the construction industry operates. Many companies have already made strides in digitally enhancing their operations, but this great opportunity is tempered with the risks and challenges, including cyberthreats, that come with the fast-paced adoption of technological change.
The biggest concern in this megatrend is the complexity of the labor market and the industry’s dependence on subcontractors or contract labor. Although this is an operational risk, there are evident ties to workforce management. And while there are both benefits and risks to the use of contract labor, there are also opportunities for construction companies that are able to harness innovative ways to manage their workforce.
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