Another recent study by Marsh and Guy Carpenter, “Future of Construction: A Global Forecast for Construction to 2030,” also found that the global construction industry has remained resilient during the pandemic and predicts that global construction production will increase. by 42%, or US $ 4.5 trillion, between 2020 and 2030, mainly due to government incentives and demand for residential construction.
The AGCS study asserted that government spending on infrastructure and the transition to a net-zero society could be key to helping the construction market thrive after the pandemic, noting that the shift to electric transportation will require investment. in new factories and manufacturing facilities for batteries and charging infrastructure. .
He also expects buildings to improve their carbon footprint and improve coastal and flood defenses and sewage and drainage systems in many disaster-prone areas in response to more frequent weather events.
At the same time, the insurer expects the governments of many countries to plan significant public investments in large construction infrastructure projects to stimulate economic activity after the pandemic crisis and promote the low-carbon transition.
Yann Dreyer, Global Construction Practice Group Leader in AGCS’s Global Energy and Construction Team, said the pandemic has radically changed the construction industry.
“The industry is facing new challenges related to supply chain volatility and soaring material costs, skilled labor shortages and an increased focus on sustainability. In addition, the accelerated deployment of cost reduction strategies and the implementation of new technologies and designs can lead to accelerating risks for construction companies and insurers, ”said Dreyer.
“Ongoing risk monitoring and management controls will be essential moving forward. Together with our clients, we will help manage these challenges as AGCS is committed to making the construction industry a key target sector for our growth initiatives.
However, the report warned that the expected growth of the construction industry could pose challenges. In the medium term, for example, sudden surges in demand could put additional pressure on supply chains and exacerbate existing shortages of materials and skilled labor, leading to schedule and cost overruns.
Many industry players may also need to speed up the implementation of efficiency and cost control measures if profit margins are affected by the economic impacts of the COVID-19 pandemic.
According to AGCS, design flaws and poor manufacturing are among the leading causes of construction and engineering losses, accounting for about 20% of the value of nearly 30,000 industry claims reviewed between 2016 and the end of 2020. .
The development of clean energy also comes with new risks, including the increased costs associated with delays or repairs to offshore wind projects as they grow and move farther out to sea and into deeper waters.