Persistent economic and political uncertainty is set to derail up to $2.5 trillion of construction activity worldwide this year, according to new research from Currie & Brown. The findings reveal that one in four projects have been cancelled altogether, as organisations struggle to deliver in the face of mounting risk across materials, energy, supply chains and labour markets.
The global study, Building certainty in an era of relentless change, surveyed more than 1,000 senior decision-makers overseeing construction pipelines worth an average of $12.9 billion.
On average, respondents reported losing 13.7% of their pipeline value in the past year – equivalent to around $2.1 billion per organisation.
Over the past year, nearly a third (32%) of projects were descoped, 29% were delayed and 25% were cancelled outright. Only one in five construction leaders said they were fully confident in keeping projects on budget in the current climate. The key risk factors identified include material cost inflation, energy price volatility, supply chain disruption and ongoing labour and skills shortages.
“In over 40 years in the industry, I’ve not seen such a persistently uncertain market,” said Dr Alan Manuel, group chief executive officer at Currie & Brow, “External shocks are part of the story, but internal practices are adding fuel to the fire, from outdated procurement to a culture that takes on billion-dollar projects without complete designs. Construction underpins economies and improves lives, so we cannot afford to let it fall behind.”
In response to the challenges, Currie & Brown has launched the Construction Certainty Index, a global benchmark to track forward-looking confidence and the effect of risk on construction projects. The index highlights four focus areas for building resilience:
- Technology – adopt technology with clear purpose and measurable value.
- Data – ensure quality, interconnected data interpreted by experienced teams.
- People – forecast skills requirements early and form strategic partnerships to secure talent.
- Mindset – remain agile, adaptable and proactive in managing risk.
Download the report here:
