Confidence in the global construction sector has fallen sharply over the past year, as organisations battle escalating cost pressures, supply chain disruption and persistent geopolitical instability
According to new research from Currie & Brown, uncertainty has added on average 12.4% to respondents’ global construction costs over the past 12 months.
Applied to forecast global construction spending, this represents almost $2tr in 2026 – close to the annual economic output of Brazil and enough to build 2,000 hospitals.
Dr Alan Manuel, group chief executive officer at Currie & Brown, commented: “An extra $2tr of cost to build the world’s homes, hospitals and critical infrastructure adds up to projects that arrive late, break budget, are scaled back, or never get built at all.”
Why is confidence in the construction industry falling?
This decline in confidence reflects the mounting pressures facing project teams. According to the research, confidence has fallen across every measure tracked, with the sharpest declines in the two areas that matter most to project viability – time and budget.
Seven in ten (70%) respondents identified global material cost inflation as having a high impact on project delivery, 64% identified energy price volatility and 59% identified supply chain disruption. Economic policy change (56%) and labour and skills shortages (54%) are also significant factors.
These risks are closely connected and can amplify one another, increasing the overall pressure on project costs and delivery. Concerningly, organisations expect most of these risks to worsen over the next 12 to 24 months – with 65% expecting material cost inflation to intensify further, and 58% expecting the same for energy price volatility.
Despite rising construction costs, some businesses are still hitting targets
Despite the overall rise in global construction costs, the research identifies a distinct group of organisations reporting consistently higher levels of delivery confidence and experiencing fewer severe impacts from uncertainty.
Representing around 32% of respondents, these ‘higher maturity’ organisations continue to invest strategically through periods of uncertainty, building capability in the areas associated with stronger decision-making, including:
- Greater use of AI to identify, monitor or mitigate risk
- Digital technologies to influence project and asset decisions
- Data analytics to mitigate uncertainty
- Embedding sustainability into project delivery
- Investing consistently in skills and training
The research finds that these higher-maturity organisations are considerably more confident they will hit their targets, with 58% confident they will meet deadlines and 47% confident they will stay within budget, compared with 41% and 36% of the rest of the sample.
This gap is evidence that targeted capability building can improve resilience and better insulate organisations from sector shocks.
Manuel concluded: “Those that are resilient to uncertainty share common characteristics.
“They’re investing in the people, technology and data that enable them to gain an earlier, clearer view of where they are exposed – and the judgement and skills they need to act. Embedding this approach is how certainty is built.”
The post Uncertainty adds almost $2tr to global construction costs as delivery confidence falls appeared first on Planning, Building & Construction Today.
