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2023 Marsh Global Contractors' Handbook

Confident bearded head Civil Engineer-Architect in sunglasses is Sstanding outside with his back to camera in a construction site on a bright day. Man is wearing a hard hat, shirt and a safety vest.

27/10/2023 · 3 minute read

Understanding risk in a changing construction industry

Throughout 2023, macroeconomic factors have continued to test the construction industry, with inflation and tightening interest rate policies affecting labor availability and material costs.

Cost uncertainties present difficulties for all industries, particularly the construction sector, where the viability of projects is sensitive to cost fluctuations. Other factors shaping the landscape include post-pandemic societal changes, increasing digital connectivity, ongoing strides towards achieving net-zero ambitions, and a pivot away from fossil fuel reliance. Yet while these factors can pose challenges for the construction industry, there are many opportunities, increasingly as a result of digitalization and decarbonization. This is especially true for contractors, as demand for new capital investment often reflects global trends.

At the same time, the construction industry is adapting and responding to change. Technology advancements, from artificial intelligence to robotics and innovative materials, are giving rise to increased investments and enhanced efficiency. Yet to harness this demand, the industry may need to rethink how to manage, mitigate, and transfer risks. Cyber, logistical, and production risks will increasingly inform risk strategies and may also necessitate a thorough review of risk allocation.

In the 2023 Global Contractors’ Handbook, we explore some of the challenges taking place in the construction sector and how these impact contractors across the world. As the needs of the construction industry change, and with it the nature and profile of risks, the insurance industry also needs to consider how best to align with the industry, with whom it has been a traditional partner. Management of risk is more important than ever and comes into focus as innovation continues to drive change and introduce new and emerging sources of risk.

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Please contact me or any of the specialists featured herein if you have any questions.

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Richard Gurney

Global Head of Construction

  • United Kingdom

Ever changing industry

The construction industry is evolving at a record pace, driven primarily by a complex combination of macroeconomic pressures. But where there are challenges, there are opportunities, which are increasingly being grasped by global contractors. Here we explore the future risks and potential solutions.

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