Agility and creativity key to managing shortages and building profits for the future.
Learn about construction market trends and insurance rate changes for 2023.
Download Report
Construction
HUB 2023 Outlook
What's covered...
Setting the Scene
What to Expect in 2023
Make a Plan
About HUB
Profitability
Vitality
Resiliency
Technology
Take better care of employees
Know your risk
Meet the Experts
HUB Construction
Setting the Scene
Innovation key to success in uncertain economy.
Tight profit margins, worker shortages, supply chain delays and higher materials costs are key risks for 2023. A well-developed risk management and insurance strategy is crucial to remaining profitable and resilient. A shortage of skilled labor lingers as the single biggest issue facing the industry and requires new approaches to onboarding, training and benefits.
What to Expect in 2023
Increasing materials costs, a lack of qualified workers and supply chain delays will challenge the construction industry. Continued unpredictability will make managing costs and schedules difficult and will likely result in slimmer profit margins in the coming year. But there is opportunity for the construction industry to strengthen profitability, improve staffing and become more resilient with strong risk management and insurance strategies.
Make a Plan
Download our 2023 Construction Outlook and Insurance Market Rate Report to see what to expect in the coming year.
Download Report
Download Report
Be Prepared
Know your subcontractors.
Attract qualified workers with benefits that they need most. Workers who receive healthcare, sick days and paid time off will be more likely to stay the course, knowing that the company supports their health, safety and well-being.
Formalize training.
Be transparent with your broker.
Tailor benefits for your workforce.
Tailor benefits for your workforce.
A construction firm’s insurance strategy can no longer solely focus on their own risk. Prequalify your contractors and ensure they share the same values of safety and risk management. Work with an expert to ensure contractors carry all the necessary insurance.
Know your subcontractors.
Workplace accidents remain a significant concern, but proper training that emphasizes the company’s commitment to protecting the workforce will reduce incidents and improve retention. Make safety a tenet of the organization, and ensure workers understand expectations and commit to maintaining a safe work environment.
Formalize training.
Formalize training.
Be transparent with your broker.
Tailor benefits for your workforce.
Know your subcontractors.
Be transparent with your broker.
Let your broker know what changes you’ve made to the business so there are no surprises at renewal. Review your insurance needs at least 90 days prior to policy renewal, so your broker can identify the best options.
Tailor benefits for your workforce.
Know your subcontractors.
Be transparent with your broker.
Formalize training.
Meet the Experts
Chief Sales Officer
Construction Practice
Craig Tappel
Linkedin Profile
Practice Leader
Kirk Chamberlain
Construction Practice
Linkedin Profile
Risk Advisor
Phil Casto
Construction Practice
Linkedin Profile
Job Title Primary
Firstname Lastname
Job Title Secondary
Linkedin Profile
Construction
When you partner with us, you’re at the center of a vast network of experts who will help you reach your goals. For more information on how to manage your insurance costs, reduce your risk and take care of your employees, talk to a HUB construction insurance specialist.
Read more about us
In commercial insurance premium brokered by HUB
$1.92B
construction clients
38,973
insurance policies managed
123,310
Subscribe
Subscribe to receive construction insights and event invitations throughout 2023.
Stay up to date
Back to Outlook Home
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
The industry also will continue to embrace new materials and technologies. From modular builds to 3-D printed buildings, organizations will continue to make use of innovations like mass timber, carbon fiber and advanced concrete, as well as embrace natural and recycled materials, some of which may be in greater supply than conventional materials and are more environmentally friendly.
This technological expansion includes a move toward digital transformation. While data analytics may improve performance and reduce some risks, using digital analytics tools also increases cyber vulnerability. Insurance rates for cyber are expected to remain elevated at 20% to 40% higher than 2022; however, insurance rates have begun to stabilize for most other lines of coverage.
An uncertain economy will squeeze profits — but not permanently.
With global economies roiling, the post-pandemic building boom could wane in 2023. Supply chain disruptions and inflation will further pressure the construction industry’s bottom line.
The cost of construction materials remains high — 17.4% higher than 2021 levels. However, the price of lumber is easing, falling nearly 70% in the third quarter of 2022 from its peak in May 2021.
Ongoing materials shortages of everything — from roofing membranes to electrical equipment — continue to hamper construction and profits. To offset these shortages and reduce uncertainty, construction firms are pre-ordering materials, but this approach ties up capital, requires storage and adds another layer of risk exposure and insurance costs.
In addition, construction profits will struggle from the acute labor shortage. With one in five construction workers 55 years or older, the shortage will likely worsen over the next decade. Finding and training new construction workers will be a priority for companies’ profits.
1. Construction Dive, “Recession likely in 2023, Fitch says,” September 13, 2022.
Technology
Resiliency
Vitality
Profitability
Technology
Resiliency
Vitality
Profitability
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
Employee stock ownership plans (ESOPs) also will be more popular in 2023, enabling company owners to strengthen their capital structure while building workers’ loyalty. Nearly 20% of the nation’s top contractors have opted for ESOPs — a trend that is expected to snowball in 2023 and through the decade.
Enhance benefits
or risk being left behind.
With record-low unemployment rates, nearly all industries are grappling with how to attract and retain talent. The construction industry is short 650,000 workers to meet current demand. With few companies offering robust benefits and high rates of workplace-related injuries, finding qualified workers is an even greater challenge. Construction firms that cement their reputation as a safe workplace and get creative with their benefits will attract and retain better qualified workers than their peers.
For most non-union and small- to medium-sized shops, benefits are rarely available. But companies pursuing qualified construction workers will need to offer and/or improve current benefits to successfully recruit and retain qualified workers. Construction firms with a non-unionized workforce are offering dental and vision benefits, and some are considering paid leave — including vacation and sick days. And to stay competitive, companies will want to consider offering employer-sponsored retirement plans, including auto-enrollment and an employer contribution match to boost participation.
6. Construction Dive, “Construction faces over half-a-million-worker shortage,” Feb. 23, 2022.
Technology
Resiliency
Vitality
Profitability
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
These rate trends and the uncertain state of the global market have prompted the construction industry to focus more attention on mitigating exposures, such as improving worker training to reduce auto accidents and onsite injuries and investing in technologies to reduce the risks of flood and fire on sites.
The industry also is acknowledging how environmental improvements can be part of their building resiliency strategy. For example, alternative materials, such as manufactured wood and concrete alternatives, will alleviate some of the supply chain and pricing concerns while advancing sustainability.
For more information on what to expect with insurance rates, download our 2023 Construction Outlook and Rate Report.
Stabilizing insurance rates, operational improvements will strengthen resiliency.
After more than two years of sharply rising rates and capacity issues, the construction insurance marketplace is stabilizing. But the industry faces greater risks than ever.
Severe storms and flooding, particularly along coastlines, have caused catastrophic property losses. Wildfires in the West decimated dozens of job sites. And the 10 warmest years on record globally have all occurred since 2005, creating conditions that endanger workers.
These factors will continue to drive up the cost of insurance, with rates for builders risk insurance in catastrophe-prone areas rising up to 40% in 2023. The construction industry also can expect to see fleet coverage rates rise 15% to 20%.
Higher interest rates and inflation in the next year will increase the risk of subcontractor default, requiring general contractors to take extra precautions when choosing firms for job sites and making sure exposures are insured.
8. The Durango Herald, “Southwest wildfire outlook grim as flames char New Mexico,” April 25, 2022.
Technology
Resiliency
Vitality
Profitability
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor
applications. An effective technology plan and protocols that include regular training and multifactor authentication (MFA) — at a minimum — will be key to protecting construction firms and finding cyber insurance to cover the exposure.
The biggest tech risk will be the failure to adopt — or adapt.
Historically, the construction industry has been slow to adopt new technology, with more than a third of firms citing limited financial resources as the primary barrier to uptake. However, firms will need to adapt to a new environment in which technology is transforming construction.
Some companies have embraced automation, wearables and additive manufacturing. Robots are completing repetitive jobs such as wall building.
Drones are surveilling and securing job sites. Smart helmets and exosuits are keeping workers safe and efficient. And 3-D printing is creating components for buildings, bridges and highways — in some cases saving as much as 40% in materials costs.
While these technological advances can improve productivity and security — and reduce accidents and injuries — they also make the construction industry more vulnerable to cybercrime, particularly breaches involving web
10. Design Build Network, “What is holding back tech adoption in construction?” July 27, 2022.
Job Title Primary
Job Title Secondary
Firstname Lastname
Linkedin Profile
Kirk Chamberlain
Practice Leader
Construction Practice
Linkedin Profile
Phil Casto
Risk Advisor
Construction Practice
Linkedin Profile
Firstname Lastname
Job Title Primary
Job Title Secondary
Linkedin Profile
HUB construction specialists will work with you to develop a tailored strategy that will protect the bottom line, support your workforce and build resiliency for 2023.
Here are some initial considerations:
HUB construction insurance specialists will work with you to develop a tailored strategy that will protect the bottom line, support your workforce and build resiliency for 2023.
Here are some initial considerations:
See more
1 of 4
2 of 4
3 of 4
4 of 4
Phil Casto
Risk Advisor
Construction Practice
Linkedin Profile
Firstname Lastname
Job Title Primary
Job Title Secondary
Linkedin Profile
Be prepared.
Talk to a HUB advisor today.
Contact Us
Be prepared.
Talk to a HUB advisor today.
Contact Us
Be prepared.
Talk to a HUB advisor today.
Contact Us
Formalize training
Be transparent with your broker
2. National Roofing Contractors Association, Supply Chain Shortage Information, August 30, 2022.
3. Timberline Magazine, “Lumber Prices Trending Down,” September 1, 2022.
4. Biznow, “The Construction Labor Shortage is Set to Intensify Over Next 6 Months,” June 28, 2022.
5. Mansion Global, “Home Builders are Turning to Natural Materials to Get Around Supply Chain Problems,” March 25, 2022
1
2
4
3
5
7. Forbes, “Why Construction Companies Are Leading The ‘Decade Of ESOPs’ Trend,” February 21, 2022.
6
7
8
9
9. Environmental Protection Agency, “Climate Change Indicators: Weather and Climate,” August 1, 2022.
10
11. 3dRIFIC, “The cost of 3D printed houses in 2021,” May 14, 2022.
12. Construction Executive, “The Ongoing Risk of Phishing in the Construction Industry,” October 12, 2021.
11
12
1. Construction Dive, “Recession likely in 2023, Fitch says,” September 13, 2022.
More than
20%
of construction workers are age 55 or older.
4
Larger firms are offering personalized benefits as part of a benefits strategy centered on delivering quality employee experiences (QEX). This approach increases worker satisfaction, engenders greater loyalty and creates an attractive environment where potential employees will want to work.
Construction firms that cement their reputation as a safe workplace and get creative with their benefits will attract and retain better qualified workers than their peers.
Builders risk insurance in catastrophe-prone areas rising up to
40%
in 2023.
HUB
Larger firms are offering personalized benefits as part of a benefits strategy centered on delivering quality employee experiences (QEX). This approach increases worker satisfaction, engenders greater loyalty and creates an attractive environment where potential employees will want to work.
Employee stock ownership plans (ESOPs) also will be more popular in 2023, enabling company owners to strengthen their capital structure while building workers’ loyalty. Nearly 20% of the nation’s top contractors have opted for ESOPs — a trend that is expected to snowball in 2023 and through the decade.
HUB
Chief Sales Officer
Craig Tappel
Construction Practice
Linkedin Profile
Practice Leader
Kirk Chamberlain
Construction Practice
Linkedin Profile
Risk Advisor
Phil Casto
Construction Practice
Linkedin Profile
Chief Sales Officer
Construction Practice
Craig Tappel
Linkedin Profile
Kirk Chamberlain
Practice Leader
Construction Practice
Linkedin Profile
HUB
Entertainment & Sports
Transportation
Real Estate
Nonprofit
Hospitality
Healthcare
Financial
Education
Construction
Cannabis
Agribusiness
FR
EN
Canada
US
EN
US
EN
Contact Us
Private Client
Employee Benefits & Retirement
Industries
Industries
Sitemap
Terms & Conditions
Privacy Statement
© 2022 HUB International Limited. 150 N Riverside Plaza, 17th Floor, Chicago, IL 60606. All rights reserved.
Subscribe
Keep pace with the latest trends.
Contact Us
Stay In the Know
Transportation
Entertainment & Sports
Real Estate
Nonprofit
Hospitality
Healthcare
Financial
Education
Construction
Cannabis
Agribusiness
Industries
Private Client
Employee Benefits & Retirement
Outlook Home
Go to HUB site
Head to hubinternational.com
to learn more about us.
Subscribe
Contact Us
Keep pace with the latest trends
Stay In the Know
© 2022 HUB International Limited. 150 N Riverside Plaza, 17th Floor, Chicago, IL 60606. All rights reserved.
Privacy Statement
Terms & Conditions
Sitemap
Outlook Home
Industries
Agribusiness
Construction
Cannabis
Education
Entertainment & Sports
Financial
Healthcare
Hospitality
Real Estate
Transportation
Nonprofit
Employee Benefits & Retirement
Private Client
Go to HUB site
Head to hubinternational.com
to learn more about us.
CA | EN
CA | FR
Cannabis
Construction
Education
Entertainment & Sports
Financial
Healthcare
Hospitality
Nonprofit
Real Estate
Transportation
Agribusiness
Employee Benefits & Retirement
Private Client
Industries
Contact Us
CA | EN
CA | FR
Employee Benefits & Retirement
Private Client
Industries
Contact Us
CA | EN
CA | FR
Cannabis
Construction
Education
Entertainment & Sports
Financial
Healthcare
Hospitality
Nonprofit
Real Estate
Transportation
Agribusiness
Employee Benefits & Retirement
Private Client
Industries
Contact Us
CA | EN
CA | FR
Employee Benefits & Retirement
Private Client
Industries
Contact Us
Subscribe
Contact Us
Keep pace with the latest trends
Stay In the Know
© 2022 HUB International Limited. 150 N Riverside Plaza, 17th Floor, Chicago, IL 60606. All rights reserved.
Privacy Statement
Terms & Conditions
Sitemap
Outlook Home
Industries
Agribusiness
Construction
Cannabis
Education
Entertainment & Sports
Financial
Healthcare
Hospitality
Real Estate
Transportation
Nonprofit
Employee Benefits & Retirement
Private Client
Go to HUB site
Head to hubinternational.com
to learn more about us.
4. Biznow, “The Construction Labor Shortage is Set to Intensify Over Next 6 Months,” June 28, 2022
Tap through to see each topic