Significant Challenges & Opportunities Facing the Construction Industry

New infrastructure, a move towards green energy and a housing market boom. The construction industry has an exciting 12 months ahead. However, the sector won’t be without its challenges as labour shortages, supply chain issues and inflation continue to pose a threat to construction firms worldwide. Below, we take a look at some of the challenges and opportunities facing the construction industry in 2022.

Brunel Insurance Brokers offers expert advice and guidance to construction industry professionals around risk management and insurance in today’s landscape. To speak to an experienced broker, call 0117 325 2224 now. 



The construction industry is entering a period of ‘strong growth’ with many sector professionals optimistic about the year ahead. According to the Association of Equipment Manufacturers, construction spending is up, with 2022 growth expected to surpass 2019 spending as demand for construction equipment increases. Governments are investing heavily in new infrastructure and green energy as we look to move towards a ‘net zero’ society.

Lowering Our Carbon Footprint


New opportunities include a demand for buildings with a lower carbon footprint, switching to more modern building methods and improving existing clean energy facilities. In addition, as we continue to embrace electric transport, investment in new facilities such as battery manufacturing factories, charging infrastructure and new plants will be needed.

The £27.5 million Urban Climate Action Programme will benefit construction firms exporting their skills, knowledge and expertise to overseas cities aiming for net-zero. The Local Net Zero programme will grant £22 million of funding to local councils looking to reduce their carbon emissions, creating further opportunities for the construction sector.

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Population Growth & New Building Methods


Population growth in emerging markets will lead to increased need for housing and infrastructure. We’re also seeing more modular construction, utilising technology to transfer more risks off site. This results in shorter timescales and enhanced quality control, as well as less environmental disruption and construction waste.

Climate Change


Last, but not least, as the world experiences more extreme weather, governments will need to look at improving coastal and flood defences, as well as our sewage and drainage systems, to cope with the effects of a changing climate. This will create opportunities for the construction industry to step in and offer expertise.



Along with such opportunities comes several key challenges for the sector. We already know that insurance premiums for the industry are up, with reports showing many firms having to resort to using credit to purchase their insurance.

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Labour Shortages


Labour shortages continue to be a major headache for construction firms, with a lack of skilled workers resulting in a struggle to stick to agreed schedules. Firms that are left with no option but to resort to hiring inexperienced workers may be leaving themselves open to increased risk from poor quality workmanship. According to the Allianz Global Corporate & Specialty report ‘Managing the New Age of Construction Risk’, this contributed to around 20 per cent of construction losses in the last five years. And while a growing sector means more work, firms are at risk of taking on too much, with time and scheduling pressures leading to more potential mistakes.

Supply Chains & Material Shortages


According to AEM, 95 per cent of construction equipment manufacturers have been hit with supply chain issues, causing a knock-on effect for construction firms. Additionally, materials shortages continue to cause holdups. With the drive towards sustainable materials and the use of products such as timber, the industry is seeing more and more projects affected by a lack of available materials.

The Construction Leadership Council warned of shortages continuing into 2022 in its construction products availability statement. While demand may have slowed recently, suppliers are still struggling to keep up. Difficulty finding HGV drivers has added to the problem. The shortages, combined with rising energy prices, have driven up material costs. Many firms have also been left uncertain over inflation, with construction material inflation over 23% in August 2021 compared with the previous year. Additionally, due to the current impact of coronavirus, continued uncertainty over the availability of materials, as well as new border arrangements, will impact the sector. 

With increasing costs, firms will be looking to reduce their outlays in other areas, which can result in increased risk where cost-cutting compromises quality.

Cyber Risks


As more and more firms move towards increasingly digitised operations, many are leaving themselves exposed to unknown cyber threats. Businesses need to be aware of such threats, building their cyber resilience and making sure adequate cyber risk management and insurance is in place.

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…and Climate Change


Climate change is also a growing concern. We’ve seen a rise in extreme weather events (wildfires, flash flooding and landslides), causing construction projects to be disrupted. These natural hazards are the second most costly reason for construction claims, with damage related to flooding also being a significant cause of loss. It’s important that construction firms take measures to mitigate these potential losses.

It’s clear that, while there is much to look forward to in 2022, for the construction sector, there are still plenty of challenges left to face. 

Have you considered how these opportunities and challenges might impact your business in 2022? Key to protecting your interests are dedicated risk management strategies, continued risk monitoring and insurance cover that is tailored to your needs. In an ever-changing landscape, it’s vital to review existing policies and ensure new threats are mitigated. To discuss your requirements, speak to one of our friendly specialists on 0117 325 2224 or at

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