Nearly eight of 10 (78%) civil and infrastructure construction firms expect project backlogs to increase or remain the same over the next year as new federal funds flow into infrastructure projects, according to a report by the Associated General Contractors of America (AGC) and Procore Technologies.
With the influx of cash, however, the report found that many firms are worried that labor shortages and productivity challenges could undermine their success with these projects.
Roughly one-third of civil and infrastructure projects fail to meet their specified budget, schedule, and quality goals, leaving important opportunities for improvement in project outcomes, according to the survey. The survey pinpointed several key factors influencing these project outcomes. Notably, 60% of the most influential success factors identified by civil and infrastructure builders were linked to workforce considerations. Material and labor costs (41%), worker skills and training (40%), and project management (39%) emerged as the top three factors impacting project success, followed by supply chain management (38%) and workflow efficiency (35%).
The report, Top Civil & Infrastructure Trends: Today’s Industry Challenges and Opportunities, is based on a survey of nearly 500 contractors.
“With increased backlogs prompted by once-in-a-generation government investment in the U.S. and Canada, civil and infrastructure organizations are on the precipice of historic projects across North America,” said Sandra Benson, VP of industry strategy at Procore. “To achieve these massive undertakings, while also navigating the ongoing labor shortage, companies will have to find innovative solutions, improve self-performance, and leverage clean data to build better.”
How have infrastructure backlogs changed?
Civil and infrastructure builders report an average increase of 25% in their backlogs since the Covid-19 pandemic. And 78% of firms expect that backlog to grow or remain level during the next twelve months.
“Civil and infrastructure construction is poised to play a greater role in the advancement of the U.S. economy than at any time in the past several decades,” said Stephen E. Sandherr, CEO, AGC. “This report is essential to understanding the current state of civil and infrastructure companies, their challenges. and their potential is essential to making sure the opportunities ahead are captured to the fullest.”
Many civil construction firms report they are investing in software and technology to help overcome some of their key challenges. About half (52%) of firms report they are adopting technology solutions that improve financial visibility and cost control on projects. Half of firms are utilizing solutions to better schedule and track labor, equipment, and materials on projects. And half report they are using planning and estimating software to ensure greater accuracy in their project pricing.
Firms are also changing the way they get involved in projects to ensure they are successful. About half (48%) of firms report they get involved at the capital design or conceptual planning phases of projects and 66% are involved in some stage of the design.
Source: Associated General Contractors of America
