Construction firms are facing a growing combination of climate, workforce, financial and cyber risks that are increasingly affecting project delivery and viability, according to a new report from Zurich Insurance Group.

The report, Beyond 2030: The Future of Construction, found that extreme weather and natural disasters represent the most significant threat to the sector over the next five years, followed by financial market pressures and labour shortages.

Risks are closely linked, with disruption to critical infrastructure identified as a central factor that can both result from and worsen other challenges.

Workforce shortages remain a major concern. The US construction sector is expected to need an additional 349,000 workers this year, while Southeast Asia faces a shortfall of 1.5m skilled workers. Australia is forecast to be more than 300,000 workers short by 2027.

The report also highlights growing skills pressures as experienced workers retire. In the UK, there are more than 100 vacancies for every apprenticeship place in some key trades, including engineering, manufacturing, plumbing and heating.

Large projects continue to face significant delivery challenges. The report found that major capital schemes run around 80% over budget on average and more than 50% behind schedule. It also noted that the average datacentre project is now worth around US$3bn, compared with US$150m five years ago, reflecting rapid investment linked to artificial intelligence.

Kelly Kinzer, global head of construction and surety, said: “Our customers deliver more complex projects in an increasingly volatile risk environment, all under more compressed schedules. Our latest research makes clear that if a project is not insurable, it will not be financed. Therefore, building resilience into the design, with insurers at the table early, is critical to making projects viable.”

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