Construction Today - December 2017 - 96

Civil
Civil | COMPANY NAME

By Kristopher Stahle

Understanding
Construction Risks
T
he performance of the construction
sector relies on a complicated web
of internal and external factors -
the level of risk varies wildly from
country to country, region to region and even
city to city. The construction industry, for example, behaves a lot differently in New York
City than it does in Madison, Wis.
To successfully and thoroughly gauge
risk, businesses need to understand factors
that impact construction on both a macro
and micro level. The big-picture economic
outlook could look positive, but the behavior
of individual companies or within individual
locations might not match up.
But on the whole, construction remains
more risk-prone than other sectors. According to an industry report by Atradius, a trade

96

CONSTRUCTION-TODAY.COM DECEMBER 2017

credit insurer, the past few years have brought only mild growth.
Widespread issues include high competition, slim profit margins,
the tendency of public buyers to pay late and a high proportion of
business failures compared to other industries. Recent major political
events have also introduced another layer of uncertainty into the
global construction sector, including China's rising inflation, the
polarizing U.S. election, Brexit and tanking oil prices.
There are also new opportunities ahead. Technology continues
to rapidly transform the industry, particularly augmented reality, drones, 3-D printing, autonomous equipment and advanced
building materials. The global trend toward urbanization is another
positive. As more of the population chooses to live in large urban
centers, the demand for housing, social transportation and utility
infrastructure also rises.

Evaluating Macro Risks
When evaluating risk on a macro level, one factor that wields a
heavy influence on the construction sector is a country's economic


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Table of Contents for the Digital Edition of Construction Today - December 2017

Contents
Construction Today - December 2017 - Cover1
Construction Today - December 2017 - Cover2
Construction Today - December 2017 - 1
Construction Today - December 2017 - Contents
Construction Today - December 2017 - 3
Construction Today - December 2017 - 4
Construction Today - December 2017 - 5
Construction Today - December 2017 - 6
Construction Today - December 2017 - 7
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Construction Today - December 2017 - Cover3
Construction Today - December 2017 - Cover4
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