Friday’s PMI statistics show that the construction industry is plagued with significant issues, with a global skills shortage being a key issue
HKA have released their latest CRUX Insight Report, Changing the Narrative, investigating capital projects globally and the issues affecting them, including a global skills shortage.
The report calls skill issues a “mega-disrupter”, affecting over half of the UK’s capital projects.
The report investigates 2,002 projects across 107 countries
The report identifies five key mega-disrupters that affect capital projects the most significantly, and they include:
Contract conflicts: administrative shortcomings, spurious claims, and tender errors account for conflict over contract formation or terms. This affects 43.2% of global projects, 51.9% in the Middle East and 68% in Africa. Although inflation is slowing, projects are still suffering from economic impacts, leading to alternative ways of saving cost, and potentially affecting contracts.
Behaviours: 49.7% of projects globally had claims or disputes regarding both individual and team behaviours, particularly unreasonable behaviours, affecting projects further.
Speed to build: 47.6% of projects were affected by the speed to build, with the need to both speed up the build and save costs leading to rushed development, and designa nd development overlapping, leading to design changes, delays, and disputes.
Skills shortage: 49.7% of projects across the globe had issues, claims, and disputes that can be attributed to gaps in skill sets and/or experience. The report lists ageing workforces, a lack of investment in human capital, and failure to attract younger talent to the workforce all lead to this issues that affects 57.8% of projects in Europe.
Environment: Factors including weather affecting work and unforeseen ground conditions, failure to design for resilience, emerging contaminants, and concerns over corporate governance and biodiversity, made up 41.3% of global projects.
The construction industry must be cautious across the globe
Renny Borhan, partner and CEO of HKA, said: “It is our firm belief that risks on infrastructure and capital projects can be mitigated more effectively. This is the purpose of our CRUX research and analysis.
“HKA’s CRUX Insight not only lays bare the primary drivers of disputed costs and time overruns, it also explores the interrelated contributory factors and forces embedded within the industry. In this year’s report, our experts outline actionable steps to break this recurring cycle of claims and disputes that imposes such a heavy burden on projects and stakeholders. We invite you to engage with our findings and consider the remedies that will lead to more successful project outcomes.”
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