Concerns about material costs, COVID-19, supply chain logistics and extreme weather events have taken a back seat to wages bills, general inflation and interest rate rises, according to Rider Levett Bucknall’s Q2 2023 International Report.
The Rider Levett Bucknall (RLB) Q2 2023 International Report finds the global construction industry still faces significant challenges in 2023, despite some recent improvements.
Material costs, the most volatile escalation influence throughout 2021 and 2022, has softened, according to the recent RLB Regional Construction Escalation Influences survey.
Other influences, such as anti-COVID-19 measures, supply chain logistics and abnormal weather events, are less pronounced than they were six months ago.
Instead, wage cost increases, general inflation and rising interest rates are more prominent influences on cost, RLB finds.
The global construction industry can expect supply chain disruptions, skilled labour shortages and rising construction costs throughout 2023.
Andrew Reynolds, RLB Global Chairman and UK & Europe Chief Executive, says RLB’s research finds one of the most significant industry impacts is the shift towards sustainable development.
Globally, the construction industry is under increasing pressure to prioritise sustainability and environmental responsibility.
Meeting green building standards, reducing carbon emissions and adopting sustainable practices require additional investments and specialised expertise.Andrew Reynolds, RLB Global Chairman and UK & Europe Chief Executive
Many countries continue to struggle with significant funding gaps in infrastructure, which limits their ability to invest in new projects and maintain existing infrastructure, the report finds.
Technology adoption and integration is another area of challenge and opportunity, Mr Reynolds notes.
“Integrating technologies like Building Information Modelling, drones and automation into existing workflows and upskilling the workforce are significant challenges for many companies.”
Complex and evolving regulations, including building codes, safety standards and environmental compliance, also adds complexity and cost.
“The construction industry is grappling with a complex set of issues, many of them interconnected. Understanding those issues and their cost implications will help projects and professionals move forward together.”
Download the Rider Levett Bucknall Q2 2023 International Report for in-depth commentary on each region globally.