Contractor performance and talent shortages weigh heavily on the minds of the global construction industry

Contractor performance & talent shortages weigh heavily

The global construction community is facing the same skills crisis that the UK construction industry is trying to combat


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Over half of construction project owners have experienced underperforming projects in the previous year despite improvements in project planning and controls, according to KPMG’s 2015 Global Construction Project Owner’s Survey: Climbing the Curve. For larger organisations, this rose to 61 per cent, while executives from the energy and natural resources and public sectors experienced even higher levels of project failure, at 71 per cent and 90 per cent respectively.

The research went onto uncover that the global construction community is facing the same skills crisis that the UK construction industry is trying to combat. It found that nearly half of the respondents are experiencing the shortages in skilled labour, with 69 per cent requiring external assistance to support existing workforce to enable delivery of projects.

The survey also found that:

  • Over two thirds (69 per cent) identify poor contractor performance as the biggest reason for project underperformance, which revealed a thirst for greater collaboration with contractors with the majority (82 per cent) of respondents expecting to see this in the next five years.
  • Seven out of ten respondents admitted that they did not meet project timetable or budget due to not accurately planning for delays or cost overruns.
  • Despite confidence in project management controls, only half of the organisations had project management information systems that raise the quality of decision-making in each phase of the project life cycle emphasizing the considerable room for improvement. And not just improvement of the quality of controls, but also the need to develop the skills of those managing the projects and using the various tools. 

Richard Threlfall, KPMG UK Head of Infrastructure, Building & Construction, said:  “This survey highlights the prevailing issues affecting the sector both in the UK and globally. We will only see a turnaround of poor performing contracts once we start seeing contractors and project owners adopt technology such as building information modelling (BIM) to enable more efficient planning, mandated apprenticeships to ensure skilled labour are bought up through the ranks, and more accurate planning of projects.”



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About the survey

‘Climbing the Curve’ is a KPMG International survey conducted in late 2014 through face-to-face interviews with 109 senior leaders – many of them Chief Executive Officers – from organizations carrying out significant capital construction projects worldwide. Respondent representation was spread across the Americas (38 percent); Europe, Middle East and Africa (26 percent); and Asia Pacific (36 percent). Respondent organizations’ annual revenue varied in size from US$250 million to more than US$5 billion, with capital expenditure budgets ranging from around US$10 million to more than US$5 billion. Twenty-six percent of the respondents’ were public bodies – typically government agencies – and some of the main industries represented include energy and natural resources, technology and healthcare.

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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