@Risk

Has the construction industry weathered the global economic crisis?

Recent research suggests that it has. In fact, almost two-thirds (64 percent) of construction industry executives expect to either increase or at least maintain their firms’ profit levels by mid-2010, according to the Global Construction Survey 2009 by KPMG.

The 32-page report, Navigating the storm; Charting a path to recovery, was compiled based on face-to-face interviews in mid-2009 with 108 senior leaders from top engineering and construction companies in 30 different countries. Taken as a whole, the results reveal a surprisingly optimistic outlook for the new year, and they also uncover an interesting new trend:

• 73 percent of respondents say they are devoting more resources to risk management –specifically with regard to greater due diligence on bid opportunities and more focus on cash flow, compliance, and safety risks.

Traditionally, risk management has been a weakness of this sector, so it’s encouraging to see that the industry is now devoting more time and resources to mitigating the broad spectrum of  risks inherent to construction industry.

Here are a few more key findings that caught my eye:

• 53 percent of the construction executives in the survey report that their backlog has either gone up or stayed level.

• Only 15 percent believe that the proposed government stimulus packages will bring a significant increase in opportunities.

• 35 percent of those polled say they have made no staff cuts.

• When asked what aspects of sustainability were most important to their customers, respondents cited profitability/cost efficiency and energy efficiency structures, with environmental impact in third place. Interestingly, the construction execs in this survey also say that sustainability is seen less and less as a competitive advantage these days, since all major competitors offer the same standards.

Looking for a little optimism as you head into 2010? Spend a few minutes with the full KPMG report here.