Global Capital Projects Outlook Released

Global Capital Projects Outlook Released

In today’s turbulent economic conditions, people who build our infrastructure projects want to know the status of their business and what the future holds. To help answer that, InEight, a company that develops and sells construction management software, launched its third annual “Global Capital Projects Outlook” survey ( to get a pulse on the AEC industry worldwide.

The Results

Despite numerous difficulties, optimism prevails for several reasons. Jake Macholtz, CEO of InEight, says, “It has been a challenging couple of years for construction with most organizations facing significant supply chain and labor challenges, which have impacted everything from cost to workmanship. However, organizations that have remained committed to achieving technology sophistication are reaping the benefits.”

Not surprisingly, nearly three quarters of the survey respondents report disruption caused by inflation, while 70 percent cite problems in the supply chain. The construction industry faces challenges in leveraging project funding, such as the $1.2 trillion in the Infrastructure Investment and Jobs Act. But despite this challenging environment, a change in project certainty emerged this year, with more projects completed on or ahead of schedule and on or below budget.

Any positive outlook is tempered by a rise in concerns over labor. Staff and skills shortages were identified as a risk to growth by 42 percent—not only entering the top three for the first time, but taking the top spot.

The report is based on an online survey (conducted in February 2023) of 300 construction professionals at large enterprises engaged in capital projects. One hundred participants were drawn from each of three regions—North America, Europe and Asia-Pacific (APAC)—and each region has equal weight in the report. Globally, 67 percent of respondents are project owners and 33 percent contractors.

The survey was designed and conducted with a market-research partner, with results submitted to InEight experts and industry leaders for commentary. Based in Scottsdale, Ariz., InEight provides project management software for project owners, contractors, engineers and designers.

The Discussion

After the report went live, InEight hosted a webinar in late June 2023 ( to discuss the report with several industry leaders: “See the Bigger Picture: A Special Look into the Global Capital Projects Outlook Report.”

InEight’s Jeff Quantrill, head of account management for Europe, Middle East and Africa (EMEA), and Brad Barth, chief product officer and moderator for the webinar, joined Anirban Basu, an economist and CEO at Sage Policy Group in Baltimore, and Paul Griffiths, senior vice president of program management at AECOM, a global engineering and construction management company.

As supply chain pressures ease and construction modernizes, more projects are being completed on time and within budget, according to the survey.

Many respondents say their organizations are using technology to understand the big picture. Project management or controls software is most popular (58 percent), while many organizations also use artificial intelligence and machine learning (50 percent), risk-adjusted project planning software (47 percent), and connected worksite communication (47 percent).

This key question in the survey reveals that construction and engineering firms see digital technologies as their main growth opportunity.

“I think we’re seeing more of the mega projects, and, as complexity goes up, those can’t be delivered without the use of technology,” notes Griffiths. “I work with InEight, and they put together what we refer to as the program controls engine, and that means we can turn up on a job with a pre-configured set of tools.”

“Only once we understand how the big picture impacts the fine details of a project and how those interact with each other, can we fully optimize project decision making to drive predictable project outcomes and support long-term growth,” adds Macholtz.

As one example of technology, the Outlook points to using connected data to enhance project delivery. Connected data map relationships among data sources to provide context and increase the value of data to a business. Construction organizations say they can better identify risk and balance the tradeoffs among scope, cost and schedule. Half of respondents say it improves risk management, while a third say it reduces cost overruns (38 percent) and leads to fewer scope changes (37 percent) and schedule overruns (33 percent). It also has a positive impact on employee productivity, according to 46 percent of respondents.

Ironically, using connected data varies by company size, with those having the fewest capital projects most likely to report using industry benchmarks (52 percent) and historic project data (51 percent), while the largest companies are least likely (43 percent for benchmarks, 46 percent for historic project data). This is possibly due to the complexity of integrating new software and managing greater volumes of data. According to the report, the varied use of connected data is creating a divide between the data haves and have-nots, with projects more likely to be completed on or ahead of schedule when industry benchmarks and historic project data were used.

“Everybody is actually working to deliver projects collaboratively,” notes Quantrill. “It’s a huge shift in perspective that has been enabled by having that ability to share information in a controlled manner. It’s a huge thing the industry is just getting to grips with, and I think it will revolutionize still further in the next five or 10 years—especially with AI and machine learning—when we have these big data lakes available.”

Construction and engineering firms are using a host of technologies to stay ahead, with project management software leading the way.

Key Takeaways

Despite a challenging operating environment, optimism has remained high for a third year in a row (92 percent of respondents indicated this in 2021, 96 percent in 2022 and 94 percent in 2023), with digital technologies, economic growth and recovery, and sustainable building projects identified as key areas of growth. Construction and capital project spending levels continue to rise, with 86 percent reporting an increase compared to 76 percent in 2022 and 68 percent in 2021.

Griffiths is not surprised. “We’ve seen slowing in some areas. But balancing that, you have some really positive drivers. Biden’s infrastructure bill, after a slow start, is starting to pick up, and we’re starting to see some of those projects and programs moving through now. The COVID backlog of projects and programs is still there. As business confidence picks up and people respond to a post-COVID world, that’s created demand.”

As the world increasingly addresses climate change and circular economy practices, sustainable building projects (50 percent) are highlighted as a key opportunity for growth for the first time. However, this trend is led by APAC, where it is the second-most-popular selection at 57 percent; it doesn’t enter the top three sources of opportunity or pass 50 percent for North America or Europe.

Despite all the optimism, stormier seas may lie ahead as an economic recession looms. “The economy has rebounded from COVID-19 with striking speed, but ‘efficiency’ will be the watchword of 2023,” explains Basu. “Project finance has been increasingly difficult to secure at a competitive rate, and with economic recession front of mind, many project owners will emphasize cost containment. The need for owners to exercise more caution than usual may ultimately reduce the availability of privately financed work. Meanwhile, merger and acquisition activity is likely to grow as contractors continue the scramble to secure sufficient human capital to deliver on the government project pipeline.”

Pouring concrete for the Infosys project in Indiana. (CarbonCure Technologies)

Clark Construction Group built the new Amazon Headquarters in Arlington, Va.

As supply chain pressures ease and construction undergoes digital modernization, more capital projects are being completed on time and within budget. According to the survey, 47 percent of projects were completed on or ahead of schedule compared with 40 percent in 2022. In addition, 45 percent also stayed on or below budget, compared with 42 percent last year. As a result, owners and contractors agree that project certainty is improving.

Experts think project certainty may be improving because the traditional silos between owner and contractor are being dissolved and replaced with closer collaboration, echoing Quantrill’s sentiments. The Integrated Project Delivery (IPD) method and Design-Build now are the most widely used delivery models at 44 percent and 43 percent, respectively. The traditional siloed Design-Bid-Build model is third-most-popular at 42 percent, while Construction Management Multi-Prime is used on 41 percent of projects and Construction Manager at Risk on 40 percent. And there are signs that collaborative delivery models are the most successful at supporting on-time project delivery, with IPD used by the majority (62 percent) of companies that stay on schedule more than 80 percent of the time.

The report notes that North America lags behind its global peers on project performance due to its use of siloed systems, processes and people as well as its unique sensitivity to global supply chain disruption. Only 42 percent of North American projects stayed on time and 38 percent within budget, compared with 51 percent and 50 percent, respectively, in APAC; and 48 percent and 47 percent for Europe. North America’s relatively poor project performance also could explain why capital investment in projects ranks lower than any other region, with 14 percent seeing a significant increase compared with 28 percent in Europe and 20 percent in APAC.

Europe finds itself in a unique situation, according to the report. On one hand, the COVID-19 rebound continues, and capital project spending is rising. Yet at the same time, rampant inflation and the war in Ukraine are having a wide impact, posing risks to the economic environment and supply chains. Despite this, the sector seems in good health, thanks in part to a robust pipeline of public infrastructure projects. Globally, 83 percent of respondents report some increase in capital project spending last year, and European respondents are slightly above average at 85 percent.

APAC continues to enjoy strong performance with a healthy pipeline of capital projects, having the most projects completed on time and within budget as well as the highest focus on sustainability and shared risk.

In the 2022 Outlook, respondents reported that projects were completed on time 45 percent of the time and on budget 46 percent. This year, the same figures become a majority, with 51 percent of projects completed on time and 50 percent on budget.

This optimism also is reflected in the sources of opportunity that respondents identify for the next year. All three regions report digital technologies as the largest opportunity for growth, but while this is identified by 57 percent of North Americans and 49 percent of Europeans, 71 percent of APAC respondents are enthused by these opportunities.

Working concrete for the UC Hastings project in San Francisco. (CarbonCure Technologies)

In the Middle East, Griffiths reports, “There’s a huge amount going on driven by mega programs in Saudi Arabia. That’s impacting not just the Middle East, but it’s also pulling in resources physically and virtually. That’s pulling teams from around the globe into supporting projects and programs in the Middle East. I think we’re still on the up, and I think one of the big challenges is going to be getting all the people we need with the right level of experience and using technology effectively to supplement that.”

In summarizing the report, Brad Barth comments on how things have changed, “If you start to put the pieces together, some of these issues—COVID, Ukraine or all the extreme weather events—have forced the industry to work a bit differently, whether it’s how we manage the supply chain or how we identify risk early. Some of those things have blown a hole in the status quo. One of the questions we get into is the use of technology to help with some of those issues.”

All the project owners, contractors and engineers involved in building our global infrastructure hope the new status quo leads to continued prosperity and optimism, and we’ll see if that
holds in the next Outlook.

About Tom Gibson

Tom Gibson, P.E., is a freelance writer specializing in engineering, technology and sustainability. He publishes Progressive Engineer, an online magazine and information source (

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