TORONTO, February 11, 2008 — 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 (PwC) 11th Annual Global CEO Survey. A striking 94% said they are confident of achieving revenue growth over the next 12 months and 56% 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. It is still a boom time for construction, despite recent uncertainty in the financial markets," says Dean Mullett, Canadian Leader Automotive and Industrial Products. "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."
Surveys from the Canadian Construction Association echoes the CEOs confidence with data suggesting that the non-residential sector, including building and engineering construction, saw a growth of 7.9% in 2007 and forecasts an additional 5% in 2008.
According to the PwC survey, however, construction leaders did identify threats to potential growth. More than half view the scarcity of natural resources as a challenge and the same proportion are concerned about the security of the supply chain. Nearly three-quarters are worried that a lack 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.
Construction CEOs are ready to take action to ensure that they have access to employees with the right skills. 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%) cite this strategy, compared to 42% 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. Construction CEOs believe that management needs to devote more time to ensuring these factors are adequately addressed — less than half (44%) agree that management spends enough time on people issues during such periods of strategic change, compared with 60% of executives overall.
The built environment in many developed countries contributes substantially to carbon emissions, often representing close to 50% of all emissions. The potential for improvement is significant and will surely 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," notes Mullett.
In terms of sustainability, construction CEOs report a noticeably more optimistic view of climate change than their peers — more than half said that climate change will benefit their business economically, compared to only 28% of CEOs across all other industries. The construction sector in many developed countries contributes substantially to carbon emissions, often representing close to 50% of all emissions. The potential for improvement is significant and will create many opportunities for the construction industry.
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