Ninety-one percent of APAC construction professionals report increases in capital project spend, as more projects complete on-time and to budget than in any other region
InEight Inc., a producer of construction capital project management software, recently launched its third annual Global Capital Projects Outlook, which surveys 300 capital project owners and contractor construction professionals across North America, Europe and APAC.
APAC saw the highest capital project spend of any region according to this year’s Outlook, with 91 per cent of respondents reporting a slight or significant increase, compared to 86 per cent globally.
APAC is also leading on project certainty, with more projects being completed on or ahead of schedule (51 per cent) and on budget (50 per cent) than anywhere else in the world. Accordingly, the industry’s mood in-region is high: 96 per cent of APAC respondents feel optimistic about the coming 12 months, compared to 93 per cent of their North American peers and 92 per cent of those in Europe.
However, the region is not immune to big picture challenges, with disruptions noticeable across scope, cost, schedule, collaboration and workmanship. Seventy-seven per cent of APAC respondents report experiencing cost inflation in the supply chain, and a further 73 per cent report supply chain delays. Labour and recruitment challenges (66 per cent) are also causing disruption, creating a key risk to growth for 44 per cent. APAC respondents are similarly concerned about the potential for economic stagnation (43 per cent).
Digital technologies are considered the primary opportunity for growth in APAC by 71 per cent, far ahead of the global average (59 per cent). Sustainable building projects and practices is also nominated by 57 per cent of APAC respondents. Respondents are hopeful that future technology investments will address changing workforce requirements (43 per cent) as well as improve risk management (46 per cent).
InEight executive vice president Asia Pacific Rob Bryant says this is evidence of the region’s continued leadership position.
“In the last two Outlooks we saw APAC establish itself as a tech leader and then consolidate,” he says.
“This year’s results show the region remains tech-savvy and willing to invest and is now staking out a leadership bid in the sustainability sense, too.”
This year’s Outlook finds that, by connecting data across project lifecycles, construction organisations can more astutely identify risk and balance the tradeoffs between scope, cost and schedule. Globally, half of respondents say it improves risk management, while a third say it reduces cost overruns (38 per cent), leads to fewer scope changes (37 per cent) and schedule overruns (33 per cent). It also has a markedly positive impact on employee productivity according to 46 per cent of respondents.
However globally, use of connected data varies by company size with those with the fewest capital projects most likely to report using industry benchmarks (52 per cent) and historic project data (51 per cent) while the largest portfolios are the least likely (43 per cent for benchmarks, 46 per cent for historic project data), possibly due to the greater complexity of integrating new technology software and managing greater volumes of data. This varied use of connected data is creating a clear divide between the data haves and have nots with projects much more likely to be completed on or ahead of schedule when industry benchmarks and historic project data were used.
“Most organisations are facing significant supply chain and labour challenges, which has impacted everything from cost to workmanship,” InEight CEO Jake Macholtz says.
“However, those organisations that have remained committed to achieving technology sophistication are reaping the benefits, both for themselves and their clients. It is only through seeing how the big picture impacts the fine details of a project, and how those fine details all interact with each other, can we fully optimise project decision making to drive predictable project outcomes and support long-term growth.”