Uncertainty threatens $2.5 trillion of global construction activity

That’s the claim from global cost and project management and advisory firm Currie & Brown, which has launched a new Construction Certainty Index.

Ahead of a new report, titled Building certainty in an era of relentless change, Currie & Brown surveyed 1,000 global decision makers, each responsible for construction pipelines averaging $12.9 billion.

On average, respondents reported a financial loss equivalent to 13.7% of their construction pipeline in the past year, an impact of $2.1 billion per organisation. One in four (25%) of projects were cancelled outright due to uncertainty over the last 12 months, the survey found.

Meanwhile, almost a third (32%) of projects were de-scoped over the last 12 months and 29% were delayed.

Among the main causes driving uncertainty were material cost inflation, energy price volatility, supply chain disruption, and labour and skills shortages, Currie & Brown found.

Just one in five (20%) of construction leaders said they were “completely confident” that they can keep their projects in budget in the current climate.

Worryingly, most construction leaders also expect conditions to worsen in the coming two years.

Some 61% of leaders said they expected material cost inflation to worsen over the next 12-24 months, while 56% predict greater energy price instability.

The report identified four areas where construction companies can build resilience to defend against uncertainty:

• Technology: Adopt technology with purpose.
• Data: Prioritise quality, link it across programmes and interpret it through the lens of real-world experience.
• People: Plan skills needs early, use technology to improve productivity, and build long-term partnerships that help secure access to the right people at the right time.
• Mindset: Stay agile, adaptable and proactively manage risk.

Dr Alan Manuel, group chief executive officer, Currie & Brown said, “The construction sector has always experienced its fair share of volatility. But this goes well beyond the usual cycle. In over 40 years in the industry, I’ve not seen such a persistently uncertain market.

“Part of the challenge lies in how we work. External factors such as rising costs, political shifts and weather events play a clear role. But systemic issues are just as critical. Outdated procurement, misaligned objectives and a culture that accepts billion-dollar projects without complete designs continue to embed risk. If we don’t control these challenges, the disruption will only grow, which we can’t allow because construction underpins economies and improves lives. This industry is too important to be allowed to fall behind.”