Rapid tech adoption and optimism at heart of global construction
08 June 2023
The companies that make up the global construction ecosystem are increasingly investing in new technology, with 81% of engineering and construction firms saying that they have adopted or are starting to adopt, mobile platforms and over a third of respondents using artificial intelligence (AI), according to KPMG’s 2023 Global Construction Survey.
The popularity of AI is continuing to grow, with 37% of respondents saying they were either adopting or just starting to adopt the use of AI (up from 23% in 2018 and 29% in 2021) – in the form of digital twins, smarter construction equipment, data and document management, and enhanced safety and communication. Comfortably over a third of respondents (43%) are either using or starting to use Robotic Process Automation (RPA) – up from 10% in 2017.
The survey also revealed that the industry is cautiously optimistic, despite facing ongoing volatility, including continued supply chain disruption, rising inflation and a possible recession. This positivity is due to a significant post-Covid-19 pipeline, government infrastructure funding, and environmental, social, and governance (ESG) demands driving renewable energy and circular economy projects.
Two thirds of respondents (66%) said they are optimistic about the direction of the construction industry with 38% of project owners being “very optimistic” – in comparison to just 18% in KPMG’s 2021 survey.
Four out of ten engineering and construction respondents expect revenue growth of more than 10% in the next 12 months. Over half (54%) of respondents can fully envisage the benefits of ESG investments and are making improvements.
Despite this positivity, the after-effects of Covid-19 are still apparent and the industry is continuing to face a number of challenges, with continued supply chain disruption, high energy and materials prices, and labor shortages pushing up costs and delaying project timelines. Just under half (45%) of project owner respondents say they have experienced a pandemic-related schedule delay or cost impact of more than 20%.
The sector continues to struggle with poor project performance, with 37% of respondents revealing that they have missed budget and/or schedule performance targets due to lack of effective risk management and that only half of project owners’ projects are meeting completion deadlines – a rise of 5% since the 2021 survey.
The rising influence of ESG in construction
In KPMGs first Global Construction survey in 2008, respondents revealed that the number one driver for sustainability amongst E&C companies was to position themselves as “environmentally aware” - this was cited by 56% of respondents.
This year’s report notes that ESG has become a more important and integrated part of leaders’ thinking, with 54% saying they fully envisage the benefits of ESG investments and are making improvements in this area. Half of E&C companies see the opportunity to gain a competitive edge through investing in ESG initiatives, suggesting that leaders are beginning to grasp the value of embracing ESG more fully.
In a nod to the importance of strong sustainability credentials to satisfy investors, the survey also found that 32% of project owners recognise the need to integrate ESG into both their projects and reporting in order to enhance access to capital to fund their projects.