Construction problems are all too common throughout a project’s life cycle. Project managers tasked with ensuring projects remain on schedule, within budget, compliant with safety regulations, and running smoothly know that it can be difficult with the amount of potential and unanticipated issues that tend to crop up.
Here are some of the top challenges and problems in the construction industry.
1. Cost overrun.
Among the top construction industry problems is cost overrun, or when a project exceeds its pre-planned budget. A McKinsey study estimates that 98% of large construction projects deal with cost overruns of more than 30%. It’s often caused by poor cost estimates during the planning phase, design change requests, and payment delays.
2. Delays.
The same McKinsey study also states that 77% of construction projects are at least 40% late. Some contributing factors can’t be controlled, such as the weather, the nationwide labor shortage (caused by recessions), and equipment failures. But there are definitely factors that can be prevented, including scheduling issues, project conflicts, and incorrect data.
3. Slow adaptation to emerging technologies.
One of the trickiest problems in the construction industry is its hesitance to adopt new methodologies, which include technologies that could very well make their workplaces more efficient. Even when construction firms acknowledge that there are technological solutions that they could benefit from, budgeting frequently remains quite small for new software platforms and gadgets.
4. Inadequate communication.
One of the more everyday construction issues is inadequate communication. Since projects require multiple professionals during the planning stage and many contractors on the job, effective information exchange is crucial for the project’s success.
5. Labor shortage.
Many construction challenges originate from one core issue: the persistent labor shortage. The industry has long been needing more skilled and qualified professionals to build the world’s future infrastructure, but it’s proven to be difficult for a number of reasons.
The Great Recession in 2008, for example, saw many skilled workers laid off or leaving the industry and never returning, and the 2019 COVID pandemic only worsened the aggressive labor shortage.
6. Poor planning, forecasting, and budgeting.
When projects aren’t properly planned or forecasted, it leads to unachievable goals, which results in construction issues like stagnant productivity. Forecasting may focus too much on the long-term and too little on the short-term.
7. Lacking organization and haphazard document management.
Another one of the prevalent construction problems is lacking organization and haphazard document management. Construction involves dealing with a lot of documentation, from contracts to material orders to receipts to insurance certificates. Manual document management can be inefficient and create room for error.
8. Problems with cash flow.
Problems with cash flow often cause construction challenges. Having a steady stream of funds is crucial to paying employees, subcontractors, vendors, and suppliers on time. When payments fall behind, it further disrupts cash flow, halting project progress and causing delays.
