Top risks facing the construction sector

(2) work force management and talent optimization, (3) business model and strategy challenges, ( 4) digitalization and new technologies, and (5) complex operating models in a global business landscape

The survey results show that geopolitical and regulatory risks are the greatest concern for construction executives. Geopolitical issues are primarily caused by the uncertainty of government support and financing, postponement and delays, changes in strategy, and commitment to project pipelines. These risks are also seen as the most difficult to manage and influence, thus making it harder to control.

Many construction companies operate in a global business environment where unpredictable political and regulatory changes can transform an attractive new region for investment into a threat.

Geographically, executives are almost unanimous in their concerns. This risk ranks among the top three in every region except North America, which identifies “capital availability, funding and liquidly” as the greatest threat.

Many governments appear keen to encourage construction as a driver for economic growth, and funding sources are seeking investment opportunities in construction. The Philippines is no different, as the present administration’s “Build, Build, Build” infrastructure program is planned to bring rapid growth in construction activities in the Philippines resulting from increasing scale of megaprojects. There are new players expected to enter the market as well.

As construction companies enter new territories, they may find it more difficult to maintain their working cultures and find the expertise they need. The Construction Risk Index report shows work force management issues are the second leading threat, triggered by the increasing requirement for digital skills and a global employee network.

Complex contracting decisions and a physically dispersed labor pool makes work force demands even more complex. The industry suffers from an aging work force, an unsophisticated career development framework and a traditional image, thus the need to attract critical talent is likely to have the most long-term impact on the industry. However, there remains great optimism in the industry.

As an example, one of the senior leaders interviewed in the Construction Risk Index said: “Technology is making this an exciting place to work and we are capturing the imagination of young people.”

The construction industry is adopting new technology and innovation. Many construction firms are delivering efficiencies and safety by digitally enhancing their operations, most commonly through 3- D printing, drones or Building Information Modeling (BIM.) In addition, the emerging uses of new modular methods, augmented reality ( AR), robotics, 4- D modeling are now gaining momentum. Technology is not just a way to streamline operations but also a key driver in changing the perceptions of the construction industry as being a modern and forward- thinking place to work, attracting a younger and diverse talent for the future.

Growth through new technologies and innovative delivery methods also bring with it new challenges and dimensions to risks. As the industry evolves, cyber security and data privacy breaches will become a greater issue. Sensitive