Construction Sector in Americas Most Optimistic Post-COVID & Sees Technology as Key to Growth

Global Capital Projects Outlook reports the construction sector in the Americas is optimistic about business prospects for the coming 12 months and sees digitization as a key opportunity for future growth.

In Sight Global Capital Projects

Despite the lingering effects of COVID-19, a new study has found the vast majority of project owners and construction professionals in the Americas are optimistic about the future and view their businesses as equipped for growth. The Global Capital Projects Outlook from InEight Inc. is based on research conducted with the world’s largest capital project owners and construction contractor professionals across the Americas, Europe and APAC, focusing on optimism levels and digitization.

“The results of our Outlook speak to a construction sector in the Americas that is brimming with confidence and optimism – one that has proved itself more than equal to the tremendous challenges it has faced this past year,” says Jake Macholtz, CEO InEight.

Findings of the Outlook show 95% of respondents in the Americas are either fairly or very optimistic about growth prospects over the next 12 months, and 94% believe their organizations to be resilient – the most positive of any region. With research conducted online over a six-week period in February and March 2021, this likely reflects the influence of recently proposed infrastructure funding legislation in the U.S., following on the back of the $1.9 trillion American Rescue Plan, both of which were anticipated to translate into significant capital project spending going forward.

Risks and Opportunities

While optimistic, respondents aren’t blind to ongoing risks. According to the Outlook, the two most commonly cited risk factors mirror the top two sources of opportunity: economic stagnation/recession (selected by 46% of owners and 50% of contractors globally), and lagging on digital transformation (38% of owners, 44% of contractors). For owners, the next most prominent risk is staff and skills shortages (31%).

Those in the Americas were relatively split when it came to the economic outlook, with 53% identifying economic recovery as an opportunity and 42% identifying economic stagnation or recession as a risk to business growth in the coming year. In comparison, respondents in Europe are somewhat more concerned, with only 44% identifying economic recovery as an opportunity and 48% considering it a threat.

Respondents were largely positive when it comes to ongoing improvements being made related to project delivery. More than half (54%) in the Americas cited an increase in the number of projects delivered on or ahead of schedule over the last three years, and 55% saw a significant or slight increase in projects being delivered on or under budget. Conversely, 61% of APAC respondents saw more projects delivered on or ahead of schedule over the period, while 52% saw a significant or slight increase in projects being delivered on or under budget.

In Sight Global Capital ProjectsAnd while market nuances exist, confidence in project certainty is expected to soar in the next three years thanks to new digital tools, shared risk models and the ability to use historic and real-time data to better manage expectations and create more accountability. A resounding 83% of respondents globally are confident of completing future projects on or ahead of schedule, and 82% confident of doing so on or under budget.

Digital Transformation

Digital transformation is considered the biggest short-term source of opportunity, according to 65% of respondents in the Americas, with data analytics, artificial intelligence and machine learning viewed as most critical for success in the next one to three years.

But while there is positivity around digitization, and significant investments are being made, the region slightly trails its international counterparts when it comes to pushing technology’s boundaries. Macholtz attributes this to the Americas’ hyper-competitive bidding culture and “laser focus on project margins,” which can make it harder for firms to expend resources to explore and invest in new technology, despite the prospect of productivity gains.

“Encouragingly though, many respondents still report significant investments being made, or planned, to take advantage of the benefits digital transformation has to offer,” he comments. “Pairing this appetite with the Americas’ capital project pipeline on the brink of a significant monetary injection, further digitization could not come at a better time. With this once in a generation opportunity in front of us, I have full confidence our industry will collaboratively rise to the occasion and continue on an already well-trodden digital path.”

The first annual Global Capital Projects Outlook is based on an online survey of 300 large enterprise, capital project and construction professionals. Globally, 64% of respondents are project owners and 36% are contractors.

Information provided by InEight and edited/enhanced by Becky Schultz.