Currently Reading

Two new surveys track how the construction industry, in the U.S. and globally, is navigating market disruption and volatility

Industry Research

Two new surveys track how the construction industry, in the U.S. and globally, is navigating market disruption and volatility

The surveys, conducted by XYZ Reality and KPMG International, found greater willingness to embrace technology, workplace diversity, and ESG precepts.

By John Caulfield, Senior Editor | June 13, 2023
Supply-chain snags are among the factors delaying construction.
Supply-chain snags are among a host of factors that contractors in the U.S. and UK say are derailing construction schedules. Chart: XYZ Reality

A recent survey of 514 project, site, and construction managers in the U.S. and the United Kingdom, conducted by OnePoll for XYZ Reality, a leading provider of augmented reality applications, found that 94 percent had project backlogs and 63 percent admitted to delivering projects off schedule either “somewhat” to “very frequently.”

“Poor project performance, low productivity, and costly major project failures—and high-profile industry bankruptcies—continue to dog the sector,” wrote KPMG International in its recently released 2023 Global Construction Survey, based on responses from 257 engineering and construction firms and project owners around the world (29 percent of which were based in North America).


E+C firms and owners are fairly optimistic about the industry. Chart: KPMG International
A survey of E+C firms and owners found them to be cautiously optimistic about the industry's direction, thanks in part to standardized processes that help them manage risk, according to a KPMG International's 2023 Global Construction Survey. Charts: KPMG

Processes and controls are helping E+C firms reduce their risk

Respondents to KPMG’s survey, while mostly “cautiously optimistic” about their industry’s future, still lamented that less than half of their projects are being completed on time. Both surveys cite similar reasons why projects stall, starting with nagging supply-chain delays, labor shortages, and rising construction costs. KPMG is also seeing a “dramatic shift” by contractors away from fixed-price and guaranteed maximum-price contractors for major projects. Colin Cagney, the firm’s director of infrastructure, capital projects, and climate advisory in the U.S., surmises that contractors are attempting to mitigate their primary responsibility for performance risk.


There are several barriers to achieving sustainable construction
Several barriers still impede sustainable construction goals. Chart: XYZ Reality

XYZ Reality’s survey notes, too, that construction firms struggle for a variety of reasons to meet their clients’ sustainability goals, and their projects get delayed as well by unexpected design changes, labor shortages, and poor jobsite communication.


How contractors are addressing cost inflation.
Both surveys find respondents taking measures to mitigate inflation and other market disruptions. Charts: XYZ Reality (above), KPMG (below)

How E+C firms and owners are meeting market challenges

The biggest priority for respondents to KPMG’s survey is improving estimating accuracy, transferring risk, and increasing innovation. Both surveys depict an industry turning more toward technology for answers. Engineering-grade AR, AI, robotics, and drones are among the technological solutions preferred by respondents to XYZ Reality’s survey. More than eight in 10 respondents to KPMG’s survey have adopted mobile platforms, 43 percent are using robotics, and 40 percent are in early stages of using artificial intelligence. KPMG’s respondents also believe emerging technologies that include 3D printing have greater potential for delivering better returns on investment.

More than one-fifth of KPMG respondents have adopted modular and offsite manufacturing on all projects, and 60 percent on at least some projects.

“As our business grows, we want to be evolutionary rather than revolutionary,” stated John Murphy, CEO of J. Murphy & Sons Ltd., a London-based infrastructure construction firm, whose comments were among several respondents quoted in KPMG’s report. “We are continuously investing to keep up with the pace of technological change—constantly progressing.”


Jobsite managers see tech having more impact on productvity
The level of adoption of technology solutions is rising, and is having a greater impact on jobsite productivity. Charts: XYZ Reality (above), KPMG (below)

More E+C firms are adopting tech solutions.

ESG and DEI are now priorities

This is KPMG’s 14th Global Construction Survey, which allows the firm the benefit of hindsight. One of the trends it has tracked is a stronger commitment among E+C firms to incorporate Environmental, Social, and Governance (ESG) precepts into their project practices. Nearly 54 percent of respondent firms “fully envision” the benefits of ESG and are aggressively pursuing maturity and improvement by embedding ESG into capital projects. (Admittedly, some of these pursuits are being mandated by stricter legislation.)

Firuzan Speroni, KPMG’s U.S. director of infrastructure, capital projects, and climate advisory, sees “a huge opportunity” for E+C firms and owners to commit to decarbonization of their buildings by measuring potential embodied carbon and choosing building materials with help to reduce it.

Respondents to the 2023 global survey ranked Diversity, Equity, and Inclusion as the third-most-important factor determining their success. Half of those respondents cited the importance of diversified workplace demographics to help address disruption.  And 46 percent agreed that updating models for remote working and jobsite travel can contribute to construction projects’ resilience. However, the survey also found that the industry needs to do a better job of attracting and retaining talent. (For example, owners were only “relatively” concerned about reducing greenhouse gas emissions from their projects.)

Finding answers in tech

Both surveys highlight the centrality of innovation to the success of projects and businesses. For example, in 2017 E+C firms were only starting to deploy project management information systems, sensors, drones, or other robotics. This year’s survey, on the other hand, found that 81 percent of respondents from E+C firms say their organizations have adopted, or are starting to adopt, mobile platforms. The use of virtual reality tool has almost doubled (to 56 percent of respondents from 28 percent in 2017). Nearly half of E+C firms responding to the survey have adopted digital twin on at least some of their projects.

“The successful adopters are championing innovation from the very top, and investing in educating their teams,” observed Suneal Vora, a Partner in Business Consulting-Capital Projects and Industry 4.0 for KPMG in India. E+C firms must advocate for innovation, though, as owners seem somewhat less willing to adopt new technologies for their projects.


The benefits of off-site manufacturing are being acknowledged by a greater portion of the construction industry today. Illustration: KPMG
A larger percentage of the construction industry now accepts the benefits of off-site manufacturing. Illustration: KPMG

Keep up with a changing landscape

In summary, the key takeaways from the KPMG Global Construction Survey are:

•Address productivity as a matter of urgency, by taking an outside-in approach

•Master enterprise risk management, and have the confidence to resist a race to the bottom in choosing and financing projects

•Truly embed ESG as a component of a company’s sustainability profile and access to capital and talent

•Become data masters, which can help make jobsites safer and attract a new breed of digital worker.

Related Stories

Data Centers | Sep 21, 2023

North American data center construction rises 25% to record high in first half of 2023, driven by growth of artificial intelligence

CBRE’s latest North American Data Center Trends Report found there is 2,287.6 megawatts (MW) of data center supply currently under construction in primary markets, reaching a new all-time high with more than 70% already preleased. 

Data Centers | Sep 15, 2023

Power constraints are restricting data center market growth

There is record global demand for new data centers, but availability of power is hampering market growth. That’s one of the key findings from a new CBRE report: Global Data Center Trends 2023.

Contractors | Sep 12, 2023

The average U.S. contractor has 9.2 months worth of construction work in the pipeline, as of August 2023

Associated Builders and Contractors' Construction Backlog Indicator declined to 9.2 months in August, down 0.1 month, according to an ABC member survey conducted from Aug. 21 to Sept. 6. The reading is 0.5 months above the August 2022 level.

Contractors | Sep 11, 2023

Construction industry skills shortage is contributing to project delays

Relatively few candidates looking for work in the construction industry have the necessary skills to do the job well, according to a survey of construction industry managers by the Associated General Contractors of America (AGC) and Autodesk.

Giants 400 | Sep 5, 2023

Top 80 Construction Management Firms for 2023

Alfa Tech, CBRE Group, Skyline Construction, Hill International, and JLL top the rankings of the nation's largest construction management (as agent) and program/project management firms for nonresidential buildings and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.

Giants 400 | Sep 5, 2023

Top 150 Contractors for 2023

Turner Construction, STO Building Group, DPR Construction, Whiting-Turner Contracting Co., and Clark Group head the ranking of the nation's largest general contractors, CM at risk firms, and design-builders for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.

Giants 400 | Aug 31, 2023

Top 35 Engineering Architecture Firms for 2023

Jacobs, AECOM, Alfa Tech, Burns & McDonnell, and Ramboll top the rankings of the nation's largest engineering architecture (EA) firms for nonresidential buildings and multifamily buildings work, as reported in Building Design+Construction's 2023 Giants 400 Report.

Giants 400 | Aug 22, 2023

Top 115 Architecture Engineering Firms for 2023

Stantec, HDR, Page, HOK, and Arcadis North America top the rankings of the nation's largest architecture engineering (AE) firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.

Giants 400 | Aug 22, 2023

2023 Giants 400 Report: Ranking the nation's largest architecture, engineering, and construction firms

A record 552 AEC firms submitted data for BD+C's 2023 Giants 400 Report. The final report includes 137 rankings across 25 building sectors and specialty categories.

Giants 400 | Aug 22, 2023

Top 175 Architecture Firms for 2023

Gensler, HKS, Perkins&Will, Corgan, and Perkins Eastman top the rankings of the nation's largest architecture firms for nonresidential building and multifamily housing work, as reported in Building Design+Construction's 2023 Giants 400 Report.


More In Category


Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021