#London #United Kingdom #construction costs #Currie Brown #Global Uncertainty

The Rising Costs of Global Construction Due to Uncertainty

In a recent survey conducted by Currie & Brown, it has been revealed that the global construction industry has faced an unprecedented increase in costs due to rising uncertainty. Over the past year, the average construction project costs have increased by 12.4%. When these figures are scaled to global projections, this translates to an alarming nearly $2 trillion impact on the construction sector for 2026.

Survey Findings

The insights come from Currie & Brown’s Annual Construction Certainty Index, which surveyed more than 1,300 decision-makers in the construction and infrastructure sectors across the Americas, Europe, and Asia-Pacific regions. Among the stark findings is a notable decline in confidence among organizations regarding their ability to meet project goals. Only 46% of organizations now believe they can adhere to project deadlines, a decrease from previous years. Similarly, a disappointing 40% expressed confidence in sticking to their budgets, representing a drop of 12 and 14 percentage points respectively.

The survey also highlighted several key factors affecting the industry, notably:

• - 70% of respondents indicated that material cost inflation is having a significant impact on project execution.
• - 64% cited the volatility of energy prices as a major concern.
• - 59% are troubled by supply chain disruptions.

Furthermore, a majority of respondents anticipate that these challenges will not only persist but will likely worsen in the coming months.

Consequences of Increased Uncertainty

The ramifications of these issues are already visible within the industry. On average, participants noted that 30% of projects have experienced delays over the past year, while 27% reported a scaling back of project scope. In what is particularly alarming, 31% of potential projects have either stalled in the planning phases or have not commenced at all, primarily due to the pervasive uncertainty.

Dr. Alan Manuel, the CEO of Currie & Brown, emphasized the need for companies to cultivate resilience in these turbulent times. He stated, “Organizations can no longer afford to navigate from one crisis to another or simply wait for conditions to stabilize. Those that demonstrate resilience amid uncertainty share common traits—they invest in people, technology, and data that allow them to identify vulnerabilities in advance and develop the necessary skills to act decisively.”

A Look at Mature Organizations

The research identified a unique subset of more mature organizations, which represent 32% of those surveyed. These entities strategically invest in areas such as artificial intelligence, digital technology, data analytics, sustainability, skills development, and training. This proactive approach sets them apart, enabling them to have significantly greater confidence in achieving their goals. Approximately 58% of these mature organizations believe they can meet project deadlines, in stark contrast to the 41% confidence level reported by the less mature counterparts. Furthermore, they report experiencing fewer severe impacts resulting from uncertainty.

Conclusion

As the Currie & Brown Construction Certainty Index illustrates, the construction industry must navigate a landscape marred by uncertainty and rising costs. Understanding the factors driving these challenges is essential for organizations aiming to foster resilience and ensure success in project execution. The focus on investment in advanced technologies and workforce capabilities will determine the future stability and growth of construction companies worldwide.

About Currie & Brown

Currie & Brown is a leading global firm specializing in project management, cost management, and advisory services. We assist our clients in executing their projects successfully across sectors and all stages of the project lifecycle.