Supply constraints and labor shortages are affecting civil construction projects, including roadbuilding and other infrastructure, according to FMI.
In its fourth quarter Heavy Civil Construction Index, the consulting firm reported that 97 percent of respondents said that projects were delayed. Of those, nearly half (47 percent) said delays were caused by supply chain constraints and/or materials pricing and availability. Nearly one in 10 (7 percent) said delays were due to contractor-led issues, including labor.
In addition to project delays, FMI reported on how often projects were not awarded at all because the low bid was above engineer estimates. One in four (23 percent) said they had “rarely” or “never” experienced the situation. Six of 10 (61 percent) said that projects were “sometimes” not awarded, 14 percent said “commonly,” and 2 percent of respondents said projects were “frequently” not awarded due to high bids.
Almost half of respondents said that they were also bidding more selectively. Among that group, 36 percent said scarcity of talent was the primary reason for increased selectivity in bidding.
On the equipment and materials side, the report indicates that 80 percent of respondents are pursuing alternative procurement as part of their organization’s strategy. One in four (28 percent) said the shift in strategy is “more recent.”
Source: FMI
