2023 – Trends and Predictions for Construction & Infrastructure
By George Dobbins
What would the new world be without some uncertainty? The industry continues to battle into several well-documented headwinds from fiscal austerity, rising inflation and interest rates, and an embattled real estate market with downward pressure on asset values, which in turn, reduces financing for new construction projects. Despite this, we prefer to side with positivity, prosperity and opportunities in our trends, which remain in abundance.
1. Carbon Zero – This isn’t a talking point that is going away. The latest figures on the re-construction of the Ozone layer shows just how impactful unified global action can have on our world. For construction, there are widespread government subsidies available, or soon-to-be available for the retrofit of existing assets into carbon neutral (or positive) assets.
2. Energy Diversification – Europe is seeking to mobilise new energy supplies to move away from their reliance on Russian oil and gas. For 2023, we expect to see several major consultations for new power stations and renewable offshore projects to start. Political (in)stability may drive action for award this year, but we expect this to be unlikely.
3. Data Centres – This remains a highly resilient growth market within construction as developers / operators and technology companies battle for prime locations to house new mega data centres. The annual data centre market was estimated to be £15bn in 2020, and is anticipated to rise to over £24bn by 2027. With some of the campus valuations in excess of £1bn, this is placing a greater pressure on major project and programme management talent, already in short-supply.
4. Technology – ConTech funding has been high for the past few years, but what is most exciting is the rate of adoption from construction companies. Digital Twin platforms such as Buildots, Imerso, SenSat and Openspace have passed their use case on site and are effectively commercialising a new market which is providing substantial ROI to contractors. As margins are squeezed through rising inflation, Technology suppliers have the potential to return profits for contractors. We expect 2023 to be another year of continued adoption rate, as well as new technologies focused on productivity emerging.
5. Major Infrastructure USA – The US has an aging infrastructure and thanks to Joe Biden’s £1tn infrastructure bill, there are tremendous opportunities to upgrade and update it throughout 2023. We expect funding to be released in line in a steady flow to avoid spiking inflation further, targeting major transportation projects including the Dallas to Houston HS line, San Diego Replacement Airport, New Jersey Portable Bridge and Phase 2 of the Expansion for Interstate 35E.
Beyond these 5 areas, we continue to see shortages in skilled labour throughout the supply chain and particularly within major project and programme management capability. We hope these drive contractors to embrace the technology solutions that are coming to market to improve the industries productivity and unlock higher profit margins.
George Dobbins is Co-Founder & Director – Construction & Technology Practice, at Beaumont Bailey. If you would like to speak to George about your business’ executive leadership hiring strategy, please get in touch with via email – firstname.lastname@example.org