Construction industry CEOs from around the world are more confident about the future of their companies than their peers in other industries, according to PricewaterhouseCoopers 11th annual global CEO survey.
Global Construction Industry Outlook
TORONTO
Construction industry CEOs from around the world are more confident about the future of their companies than their peers in other industries, according to PricewaterhouseCoopers 11th annual global CEO survey.
Ninety-four per cent said they are confident of achieving revenue growth over the next 12 months. Fifty six per cent of these are even more bullish, saying they are very confident about growth.
“The CEO survey results reinforce what we are seeing with our clients in the Canadian construction sector,” said Dean Mullett, PwC’s Canadian leader for automotive and industrial products.
“It is still a boom time for construction, despite recent uncertainty in the financial markets.
“We’ve got a number of drivers for growth in Canada, mostly in the non-residential space and in the Western provinces that ties in to the 2010 Vancouver Olympics and oil sands construction in Alberta.”
A year-end report issued jointly by the Canadian Construction Association and the Construction Sector Council echoed the CEOs’ confidence. Investment in the non-residential sector, including building and engineering construction, was forecast to grow by 7.9 per cent in 2007 and by an additional five per cent in 2008.
According to the latest PwC survey, however, construction leaders from around the world did identify threats to potential growth. Nearly 75 per cent are worried that a lack of availability of key skills could threaten future business growth.
“This undoubtedly reflects skill shortages unique to the sector and concern over the ability of specialist contractors to deliver,” PwC said.
Construction CEOs are ready to take action to ensure that they have access to employees with the right skills, the company said.
Respondents in this sector are more likely to consider acquiring other companies to obtain critical expertise as an effective means of addressing talent shortages. More than half (52 per cent) cite this strategy, compared with 42 per cent of CEOs across all industries. Almost half of construction CEOs said that they are planning a cross-border merger or acquisition in the next 12 months.
A focus on people issues is a key factor for success in periods of strategic change such as a merger or acquisition, PwC said. Construction CEOs believe that management needs to devote more time to ensuring these factors are adequately addressed. Less than half (44 per cent) agree that management spends enough time on people issues during such periods of strategic change, compared with 60 per cent of executives overall.
In terms of sustainability, construction CEOs report a noticeably more optimistic view of climate change than their peers in other industries. More than half said climate change will benefit their business economically, compared with just 28 per cent of CEOs across other industries.
The built environment in many developed countries contributes substantially to carbon emissions, often representing close to 50 per cent of all emissions, PwC said. The potential for improvement is “significant” and will create many opportunities for the industry.
“Canada has seen sustainable construction practices escalate in the commercial and residential construction industry as more consumers demand environmentally friendly building practices,” Mullett said.
DCN NEWS SERVICES
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