KPMG’s 15th Global Construction Survey – its biggest to date – polled 375 construction leaders across every major region. The headline finding is a paradox: optimism is at its highest in years, yet three in four executives are more risk-averse than 12 months ago. The industry is growing, but it’s growing cautiously. And that caution, if it goes too far, could be the thing that stalls the transformation everyone agrees is now unavoidable.
Table Of Content
- The Risk Delta: Why Being Optimistic and Risk-Averse at the Same Time Is a Problem
- Where the Work Is Actually Coming From
- The Four Strategic Priorities Every Exec Team Is Talking About
- The People Problem Is Still the Hardest One to Solve
- Technology Is a Priority – But Most Firms Are Still Collecting Tools, Not Building Systems
- Regional Snapshot: How Strategic Priorities Differ Across Markets
- Frequently Asked Questions
A lot of industry reports tell you things you already knew, dressed up in consultant language and buried under 50 pages of charts. The KPMG Global Construction Survey 2025/2026 isn’t entirely that – there are some genuinely useful findings in there, and a few numbers that should prompt a real conversation in any exec team.
The central tension the report identifies is something most senior people in construction will recognize immediately: demand is strong, backlogs are healthy, and the big infrastructure and energy transition pipelines look real. But the appetite to take on risk – new clients, new geographies, bigger bets on technology – has actually fallen. Executives are more cautious now than they were when times were harder. That’s worth sitting with for a moment.
This piece pulls out the findings that matter most, adds some context from the ground, and cuts through the parts that are really just KPMG saying “hire us.” If you want the full 47-page PDF, the link is in the sources at the bottom. If you want the version you can actually use in 10 minutes, read on.
The Risk Delta: Why Being Optimistic and Risk-Averse at the Same Time Is a Problem
More confident, but less willing to bet on it
KPMG introduces what they call the “risk delta” – the widening gap between the risks construction companies face and their appetite for actually taking them on. Put simply: the industry sees a bigger playing field, but is running tighter plays. Seventy-one percent of the 375 leaders surveyed feel good about where the sector is heading, the strongest reading since 2023. But three out of four of those same leaders report being more risk-averse than a year ago. Those two things don’t sit comfortably together.
The drivers of that caution are predictable enough: shifting client spending, rising material and equipment costs (one in three executives rank this among their biggest challenges), supply chain fragility, and a regulatory environment that keeps getting more complex. Ninety percent of respondents say clients are now demanding more sustainable options – which is both an opportunity and an obligation that costs money to meet. Put those pressures together and you can see why boardrooms are tightening criteria for which projects to bid, which clients to pursue, and how much to spend on transformation in any given year.
The risk KPMG flags – and it’s a fair one – is that too much caution compounds over time. Pulling back on technology adoption, delaying expansion into new sectors, and being overly selective on bids can protect margins in the short term. But it can also lock firms into a narrower lane just as the market is about to reward those willing to move. The next 2-3 years, the report suggests, will likely separate the companies that treated transformation as a live priority from those that kept pushing it back to the next planning cycle.
Where the Work Is Actually Coming From
The pipeline is real – but it’s concentrated in specific sectors
On the demand side, the picture is fairly clear. Water and utilities top the growth outlook, with 91% of respondents expecting expansion there over the next 12-24 months. Green power generation and infrastructure projects follow closely, both at 89%. Transport, warehousing and logistics, and residential round out the top six. What’s notably lower on the list? Offices and fossil fuel power generation. That’s not a surprise, but it’s a useful confirmation that the energy transition pipeline is genuinely reshaping where the big work sits.
Geographically, optimism is strongest in North America (77%), followed by EMEA (76%) and APAC (74%). In EMEA – which includes the UK – the focus is on green power and water utilities, reflecting the weight of sustainability regulation in this region. For UK contractors specifically, that maps well to what’s already visible in the market: the data center boom, offshore wind supply chain work, water infrastructure upgrades, and the regulated utilities pipeline are all real. For more on how technology is reshaping project delivery in these sectors, see our breakdown of construction robotics in 2026.
“Transformation is no longer a matter of ‘if’ but ‘how quickly’ – with 53% of executives concerned about their ability to adapt at the required speed.”KPMG Global Construction Survey 2025/2026
The Four Strategic Priorities Every Exec Team Is Talking About
Efficiency first, then growth – with technology and risk management close behind
KPMG asked respondents to rank their strategic priorities for the next 12 months. The top four came back as: operational efficiency and profitability (75%), market expansion and client focus (72%), technology and innovation (61%), and risk and resilience management (53%). That ordering tells you something. Efficiency beats growth. Protecting margin is more pressing than finding new markets. For mid-sized firms – those in the $500M to $5B revenue bracket – operational efficiency ranked highest of all, with 87% citing it as critically important. That’s the bracket where the pressure to scale without sacrificing control is sharpest.
The three operational levers the report identifies as critical to actually achieving those priorities are workforce (76% rank it as most important), digital systems and processes (68%), and innovative delivery methods (61%). The point KPMG makes – and it’s worth taking seriously – is that these only work when they’re connected. Running a digital transformation program while your workforce still operates in silos, or adopting new delivery models without the data infrastructure to support them, produces marginal gains at best. The firms that pull all three levers together are the ones likely to see compounding returns.
- Operational efficiency and profitability (75%). Accelerating productivity, re-engineering processes, and strengthening cost governance – because in a 2-3% margin industry, inefficiency is a direct threat, not a hidden cost.
- Market expansion and client focus (72%). Targeting new geographies and next-generation infrastructure – renewables, hyperscale data centers, and regulated utilities – with differentiated propositions.
- Technology and innovation (61%). Moving from fragmented tools toward connected ecosystems where data flows from design through to commissioning, enabling real decisions in real time.
- Risk and resilience management (53%). Embedding sustainable practices, rethinking risk-sharing in contracts, and building supply chains that don’t snap under pressure.
The People Problem Is Still the Hardest One to Solve
Technology investment without workforce readiness is money spent badly
Fifty-five percent of respondents identify skilled labor shortages and capability gaps as among their biggest operational challenges. That’s not a new finding – but the framing this year is sharper. KPMG makes the case that the talent problem isn’t just about headcount. It’s about digital fluency. The firms that will pull ahead aren’t necessarily the ones with the most people, but the ones whose people can operate, maintain, and optimize the tools that are already being deployed.
The workforce picture has three interlocking problems: retention of experienced professionals and graduates (particularly project managers and engineers), outdated skills that haven’t kept pace with new technology, and an aging workforce draining institutional knowledge faster than it can be transferred. Seventy percent of firms plan to continue relying on contingent or freelance workers – which is a pragmatic response to the shortage, but also a structural vulnerability when it comes to capability-building and knowledge retention. The encouraging counter-signal: 82% of respondents are committed to increasing investment in employee training, and over 21% of total transformation spend is being allocated toward people-related initiatives. That’s the largest single category – more than technology and data (18%) or process improvement (17%).
For a closer look at how the labor shortage is driving technology adoption on site, our piece on field-focused ConTech for craft workers covers the ground-level reality in more detail.
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Join 2500+ ReadersTechnology Is a Priority – But Most Firms Are Still Collecting Tools, Not Building Systems
Adoption is happening. Impact isn’t – yet
Sixty-eight percent of executives rank digital systems and processes as critical to their strategic priorities. Fifty-one percent of total transformation investment is going toward technology, data, process improvements, and innovative construction methods. Those are meaningful numbers. The problem, which KPMG identifies with unusual frankness for a consulting firm, is that adoption and impact are not the same thing. Most firms have accumulated a collection of digital tools. Very few have integrated them into a system where data flows usefully from design through procurement through site delivery through handover.
The goal the survey points toward is what they describe as “connected ecosystems” – platforms where data moves in real time and enables prescriptive insights rather than just reporting what already happened. Collaborative contracting, supply chain digitization, and off-site manufacturing are all expected to become standard practice within five years according to respondents. That’s an aggressive timeline for an industry that has historically moved at a different pace. But the direction of travel is clear, and the firms building toward integration now – rather than managing a stack of disconnected subscriptions – are putting themselves in a structurally better position.
Regional Snapshot: How Strategic Priorities Differ Across Markets
Same pressures, different weightings
The report breaks down priorities by region, and the differences are worth understanding – particularly for firms operating across multiple markets or eyeing expansion.
| Region | Overall Optimism | Top Priority | Key Demand Drivers | Standout Pressure |
|---|---|---|---|---|
| North America | 77% | Market expansion + technology innovation | Infrastructure modernization, utility upgrades | Seizing the infrastructure boom before it peaks |
| EMEA (incl. UK) | 76% | Operational efficiency + market expansion | Green power generation, water utilities | Rising costs and sustainability regulation |
| APAC | 74% | Operational efficiency and profitability | Green power, water, transport, large infrastructure | Supply chain constraints and geopolitical uncertainty |
| South America | 71% | Market expansion and client focus | Infrastructure projects, water utilities, residential | Government-led urbanization at scale |
Frequently Asked Questions
The risk delta is the gap between the level of risk the industry is exposed to and executives’ willingness to take on new risk. In 2025/26, that gap is widening – demand is strong, but three in four executives report being more risk-averse than 12 months ago. KPMG’s concern is that this combination – rising opportunity, falling appetite – could lead firms to underinvest in technology, avoid new markets, and become overly selective on bids at exactly the moment when bolder moves would pay off. Short-term caution can become long-term competitive disadvantage. (Source)
Water and utilities top the list at 91% of respondents anticipating growth, followed by green power generation and infrastructure projects (both 89%), and transport (88%). Residential and warehousing/logistics also rank highly. At the lower end: fossil fuel power generation, offices, and retail. The pattern is clear – the energy transition and next-generation infrastructure are where the structural demand sits, and firms not already positioned in those sectors should be asking hard questions about how to get there. (Source)
According to the survey, 21% of total transformation investment is going toward people-related initiatives – the single largest category. Technology and data solutions account for 18%, process improvement 17%, innovative construction methods and delivery 16%, supply chain and partnerships 15%, and sustainability 13%. The people-first allocation is striking given how much the conversation tends to focus on technology. It suggests the industry is recognizing that tools don’t transform organizations – the people using them do. (Source)
The picture is not good, but it’s not static either. Fifty-five percent of respondents identify skilled labor shortages and capability gaps as major challenges. The three root causes are: retention failures (particularly among project managers and engineers), outdated digital skills, and an aging workforce with no adequate replacement pipeline. The response the report recommends – and which 82% of firms say they’re committing to – is sustained investment in training and upskilling, with a specific focus on digital fluency, BIM competency, robotics operation, and data analytics. The firms that treat workforce development as a long-term investment rather than a cost center are the ones most likely to execute on their technology strategies. (Source)
KPMG draws a distinction between adoption and impact – and finds most firms are getting the first without the second. Digital tools are being deployed, but they’re largely operating in silos. The report’s benchmark for real impact is a “connected ecosystem” where data flows without interruption from design through commissioning, enabling not just visibility but prescriptive decision-making. Collaborative contracting, supply chain digitization, and off-site manufacturing are expected to become standard within five years. The implication for firms right now: the priority shouldn’t be adding more tools, it should be integrating the ones you already have. (Source)
There’s a structural case for it. Government-backed infrastructure programs – the US IIJA, ongoing APAC development pipelines, UK regulated utilities frameworks – are creating durable demand that isn’t dependent on a single client or market cycle. The energy transition is generating work across renewables, grid infrastructure, and water systems that will run for decades. Data center construction is accelerating. These are real pipelines, not speculative. The cautious reading is that a lot of this work is being competed for by the same pool of firms with the same labor and supply chain constraints – so winning it profitably, rather than just winning it, remains the hard part. Seventy-one percent optimism is reasonable. Complacency would not be.
