Despite the many challenges faced by the construction industry this year such as border closures, material shortages, and a lack of specialised local workers to meet project demands, construction professionals in the Asia-Pacific (APAC) region remain optimistic about their organisation’s future, a new global report has found.
Launched this year by InEight, a global leader in construction project management software, the Global Capital Projects Outlook drew insights from 300 respondents selected from the world’s largest capital project owners and contractor construction professionals across the Americas, Europe and APAC, focusing on optimism levels and digitisation.
The outlook found that 93 percent of capital project and construction professionals in the Asia-Pacific (APAC) region are optimistic about their organisation’s future with 89 per cent believing their organisation to be resilient,
Historically, the construction industry has been one of the slowest to digitally transform but the findings suggest professionals in the industry are recognising the value technology can add. The outlook found that 100 per cent of APAC respondents had already invested in project management software, connected worksite communications, and operations and maintenance solutions.
Digital transformation is considered the biggest short-term source of opportunity according to 78 per cent of respondents in APAC with data analytics, artificial intelligence and machine learning considered most critical for success for the next one to three years.
However, respondents are divided on the ongoing impact of the economic situation, with 59 per cent identifying economic recovery as an opportunity, and 52 per cent identifying economic stagnation or recession as a risk to their organisation’s growth in the coming year.
Despite facing challenges such as border closures and material shortages, respondents are largely positive when it comes to improvements being made by the sector to deliver projects on schedule.
Though when it comes to delivering projects on time, 61 per cent of respondents in APAC say that, in the last three years, the number of projects delivered on or ahead of schedule has increased, compared to 56 per cent and 54 per cent in Europe and the Americas respectively.
However, when asked about delivering projects on or under budget, 55 per cent of those in the Americas and 56 per cent in Europe report a significant or slight increase in projects being delivered on or under budget, compared to 52 per cent of APAC respondents.
Delivering projects on budget remains a challenge within the region, with 20 per cent of APAC respondents revealing that the average cost of a project that goes over budget is 15-20 per cent over the original approved budget.
However, encouragingly 89 per cent of APAC respondents are confident of completing future projects on or ahead of schedule, and 91 per cent confident of doing so on or under budget. These figures reflect the highest levels of confidence in comparison to the 83 per cent and 82 per cent reported globally.
Commenting on the Outlook, Rob Bryant, Executive Vice President APAC, InEight, said the results from the APAC region were encouraging.
“It’s encouraging to see that the results of our Outlook show a construction sector in the APAC region that is full of confidence and optimism, despite facing tremendous challenges this past year. Capital project spending is on the rise in APAC, as governments go on infrastructure spending sprees to avoid recession, which has led to high confidence levels locally,” Bryant said.
“While investment in the sector is increasing, organisations increasingly acknowledge the importance of digital transformation to keep projects on time and on budget. Respondents in the region are acutely aware that lagging behind competitors in their digital transformation efforts presents the biggest risk to their organisations in the coming year. In fact more than half of respondents list this as the biggest threat, compared to 30 per cent in the Americas and 37 per cent in Europe,” he added.
He also noted the region showed strong appetite to invest in digital transformation, but this enthusiasm was being hampered by difficulties with integration and implementation, as well as issues such as a lack of available capital and return on existing investments.
“Pleasingly though, many respondents still report significant investments being made, or planned, to take advantage of the benefits digital transformation has to offer. Pairing this motivation with APAC’s sizeable capital project pipeline, further digitisation could not come at a better time.”
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