SCOTTSDALE, Ariz. - Wednesday, 14. June 2023
Nearly three
quarters of respondents are experiencing cost inflation and supply chain
disturbance, but industry must remain focused on deploying technologies
that drive predictable project outcomes to support long-term growth.
(BUSINESS
WIRE)--InEight Inc., a global leader in construction capital project
management software, today launches its third annual Global Capital
Projects Outlook. The Outlook draws insights from research conducted
with 300 of the world’s largest capital project owners and contractor
construction professionals across North America, Europe and APAC.
Nearly
three quarters of respondents (74%) report disruption caused by cost
inflation, while 70% cite delays and disturbances in the supply chain
according to this year’s Outlook, with impacts reported across scope,
cost, schedule, collaboration and workmanship. The construction industry
continues to face challenges around effectively leveraging project
funding, such as the $1.2trn in infrastructure spend outlined in the
Infrastructure Investment and Jobs Act. Despite this challenging
operating environment, a step change in project certainty is evident
this year, with more projects being completed on or ahead of schedule
(47%) this year compared to 2022 (40%). And regarding cost control, 45%
reported staying on or below budget, compared with 42% last year.
The
Outlook adds to growing evidence that the ability to both see and
understand the bigger picture through connected data enhances project
delivery.
Positive impacts of connected data
Through
connected data across project lifecycles, construction organizations say
they can more astutely identify risk and balance the tradeoffs between
scope, cost and schedule. Half of respondents say it improves risk
management, while a third say it reduces cost overruns (38%), leads to
fewer scope changes (37%) and schedule overruns (33%). It also has a
markedly positive impact on employee productivity according to 46% of
respondents.
Use of connected data varies by company size with
those with the fewest capital projects most likely to report using
industry benchmarks (52%) and historic project data (51%) while the
largest portfolios are the least likely (43% for benchmarks, 46% for
historic project data), possibly due to the greater complexity of
integrating new technology software and managing greater volumes of
data. This varied use of connected data is creating a clear divide
between the data haves and have-nots with projects much more likely to
be completed on or ahead of schedule when industry benchmarks and
historic project data were used.
Commenting on the Outlook, Jake
Macholtz, CEO, InEight, says: “It has been a challenging couple of years
for construction, with most organizations facing significant supply
chain and labor challenges which have impacted everything from cost to
workmanship.
“However, those organizations that have remained
committed to achieving technology sophistication are reaping the
benefits, both for themselves and their clients. The Outlook sets out a
strong case for all construction organizations to follow in these
footsteps, highlighting the many benefits for risk management and
communication to project certainty, to name a few.”
A challenging operating environment
Nearly
three quarters of respondents (74%) report cost inflation as
disruptive, and 70% cite delays and disturbances in the supply chain. On
the labor side, 68% point to pay inflation, and 64% point to the
related issue of labor and recruitment challenges.
Many
respondents say their organizations are using technology to understand
and engage with the big picture operating environment. The use of
project management or project controls software is most popular (58%),
while many organizations also use artificial intelligence and machine
learning (50%), risk-adjusted project planning software (47%), and
connected worksite communication (47%).
Macholtz says: “Only once
we understand how the big picture impacts the fine details of a
project, and how those fine details all interact with each other, can we
fully optimize project decision making to drive predictable project
outcomes and support long-term growth.”
Despite a challenging
operating environment, optimism has remained high for a third year in a
row (92% in 2021, 96% in 2022 and 94% in 2023) with digital
technologies, economic growth/recovery and sustainable building projects
identified as key areas of growth. Construction and capital project
spending levels continue to trend upwards, with 86% reporting an
increase compared to 76% in 2022 and 68% in 2021.
This positivity
is somewhat tempered by a significant rise in concerns over labor
challenges. Concerns over staff and skills shortages were identified as a
risk to growth by 42% – not only entering the top three risks for
respondents for the first time, but also taking the top spot. Yet, even
with an intensifying skills shortage, along with disruption caused by
cost inflation and supply chain delays, industry confidence remains high
this year, with those feeling somewhat or very resilient slightly
increasing from 91% in 2022 to 92% in 2023.
To access the full report, visit InEight Global Capital Projects Outlook.
About Global Capital Projects Outlook from InEight
This
report is based on a survey of 300 large enterprise capital project and
construction professionals, conducted in February 2023, via an online
survey.
The survey included 26 questions designed to gauge
general confidence and optimism levels across the industry and assess
the impact of and response to the macro environment. The survey also
sought to identify how project delivery models and best practices are
evolving.
Of the 300 respondents, with 100 participants drawn
from each of our focus regions of North America, Europe and APAC, each
region has equal weighting in the report. Globally, 67% of respondents
are project owners, and 33% are contractors.
All respondents are
involved with the construction of capital projects; however, to get a
true reading of the global construction sector worldwide, we included
those working in broader industries:
Biotechnology
Central
Government or
NDPB
Chemicals and
Pharmaceuticals
Construction
Defense
Distribution
Education –
Private
Education –State
Financial services
(excluding
banking)
Hospitals
IT and Computer
services
Leisure and
entertainment
Manufacturing
Mining
Oil & Gas
Property
Retail
Telecommunications
Utilities
The
survey has been designed and conducted in conjunction with a
specialized global enterprise technology market research partner, with
results then analyzed and submitted to InEight experts and industry
leaders for commentary based on their experiences and vantage points.
Where
possible, results have been compared to our previous survey in 2022.
However, this is not possible in all cases due to new questions and
wording alterations in this year’s edition.
About InEight
InEight
provides field-tested project management software for the owners,
contractors, engineers and designers who are building the world around
us. Over 575,000 users and more than 850 customers worldwide rely on
InEight for real-time insights that help manage risk and keep projects
on schedule and under budget across the entire life cycle.
From
pre-planning to design, from estimating to scheduling, and from field
execution to turnover, InEight has powered more than $1 trillion in
projects globally across infrastructure, public sector, energy and
power, oil, gas and chemical, mining and commercial. For more
information, follow InEight on LinkedIn or visit InEight.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230612235581/en/
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Contacts
InEight media contacts:
Linda Coy, Marketing Director, InEight
pr@ineight.com
Emily Sakamoto, Account Manager, Aspectus Group
emily.sakamoto@aspectusgroup.com
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