Business sustainabilty
Workforce sustainability
Performance trends
Economic trends
and outlook
Industry
overview
Innovation
Workforce
Contracts
ESG
Economy
Fed Legislation
Public Investment
Build Demand
Strong industry confidence despite economic difficulties across business types and sizes
Public investment through U.S. bipartisan infrastructure law and investing in Canada plan
Owners continue to invest in real property, have access to capital
Federal legislation supporting climate, domestic manufacturing, and consumer demand for green energy and building
Project backlogs provide firms with steady demand
Industry generally tracks with economic indicators
Strengths
Change resistant — industry players slow to adopt innovation
Construction productivity has lagged behind other major industries such as retail, manufacturing
Performance — high percentage of total projects going over budget and over scheduled timeframes. Key drivers: 1) Project complexity 2) Labor and supply coordination issues
Resilience to adversity — climate, workforce, supply chain
Weaknesses
Technology, data and digital transformation
Improve workforce resiliency:
- Address mental health, substance misuse
- Upskilling, training, recruiting
- Diversity, equity, and inclusionImprove contracts
Evolving environmental, social, governance practices
Opportunities
Skilled labor shortage, pre-existing COVID-19. Workforce shortage reached 500k workers in 2023.
High inflation and threat of recession
Decarbonization and construction sustainability: construction is responsible for 10 percent of all greenhouse gas emissions through 2019
Mental Health: construction industry workers are 5x more likely to die from suicide than from job site incident
Threats
Industry overview
Biden's infrastructure bill
2022 CHIPS and Science Act
The Inflation Reduction Act
Construction workforce
Workforce sustainability
Global private equity deal flow:
construction and engineering
Private equity investment in the construction space has increased significantly over the past few years.
Zoom in
Economic trends and outlook
Environmental social governance (ESG)
Hover below to learn the six major benefits from integrating ESG into a firm’s operating model
Retiring tenured workers, an increase in unskilled worker hiring, and the reduction in immigrant labor are key drivers to the shortage.
Construction unemployment levels have hovered near 50-year lows since 2021.
The construction industry will need to attract 546,000 additional workers on top of the normal pace to meet the demand for labor.
Cost reduction
Top-line growth
Minimized regulatory and legal interventions
Increased employee productivity
Incentives for publicly traded companies to deploy practices that improve global climate
Optimized capital deployment/return
Artificial intelligence that helps to streamline data will have a positive impact on risk management.
Numerous software solutions can help organizations obtain reports, automate stakeholder communication, manage contract execution, approve changes, and much more.
Artificial intelligence
Software solutions
See what can help
Data coordination challenges are a major contributor to delayed and over-budget construction projects.
Building information modeling
Intelligent use of building information systems can boost productivity, prevent rework, and play a crucial role in stakeholders’ contractual risk.
IPD is full-scale collaboration among owners, general contractors, select subcontractors, and designers — a model in which all parties equally share risks and rewards.
Integrated project delivery (IPD)
Hover over the image to read three situations to be aware of when it comes to IPD
Possible coordination issues between parties
Poor front-end research impacting project success
Profit pool depletion
Responsibility definitions and assignment framework
Project schedule
Value engineering key considerations
Best practices
Impact tracking framework
Project and performance trends
A construction company with 1,000 workers can expect to lose up to $1.9 million in certain states each year.
Losses
Employees in construction are two times more likely to have a substance abuse issue.
2x more likely
70 percent of people with an illicit substance abuse disorder are employed.
Substance abuse
More than 90,000 Americans died from overdose in 2020.
Overdose
Opioid misuse in construction
Educating and upskilling labor for the future
Employment of construction managers will outpace the other-industry average, growing 5 percent in the next decade.
Construction personnel are better positioned to succeed with the support of specialized training, known as upskilling.
Upskilling is providing the opportunity to develop new competencies that relate to their current position.
Business sustainability
Permanent modular construction
Click below to read about four key drivers behind modular construction growth
Project delivery
Schedule and budget
Costs and control
Labor shortages
Inefficient project delivery
Typical construction schedule and budget underperformance
Unpredictable costs and lack of control over supply availability
Ongoing labor shortages compounded by construction demand and increasingly unpredictable project timelines
3D printing is the practice of constructing materials using computer-aided drawings and 3D printers that can be used in constructing buildings.
3D printing
Additive manufacturing (AM)
The market for 3D homes is expected to increase due to supply chain and labor shortages, which have increased timelines and costs for traditional construction.
3D homes
The increased prevalence of AM in construction also brings increased risk for contractors and builders.
Increased risk
87.3% white
12.7% non-white
89.1% male
10.9% female
Diversity, equity, and inclusion
Climate change
$39.7 billion
2023 loss estimates exceed
in total
acres in the U.S.
in 2022
7.5 million
fires burned
66,000
As of July 2023, there have been
$1 billion
and climate disaster events each with losses exceeding
15
confirmed weather
Three legislative issues impacting public spending and housing demand
Construction demand tied to economic cycles
Optimal project delivery
Construction workers in 2022
For more information on each of these topics as well as sources, please download the complete Construction Risk Trends report.
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IPD is full-scale collaboration among owners, general contractors, select subcontractors, and designers — a model in which all parties equally share risks and rewards.
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