QBE North America has unveiled its US Commercial Construction Outlook, developed in partnership with Control Risks, shedding light on the risks and opportunities the sector is likely to encounter in the near term.
Despite facing labour and cost challenges, the commercial construction industry in the US remains on an upward trajectory, driven by factors such as industrial construction, tax incentives, private equity activity, foreign investment, and green building initiatives.
The report notes that labour shortages continue to be a significant hurdle for construction firms. Although construction employment has reached record highs, an ageing workforce and immigration restrictions are creating a gap in the availability of skilled workers.
Insurers have cautioned that companies trying to fill these gaps with less experienced workers could see an increase in workplace accidents, property damage, and construction defects. This makes tailored risk management and adequate insurance coverage critical for mitigating such risks.
Material costs are also rising, with tariffs pushing up prices on key inputs such as steel, aluminium, and copper to levels well above early-year forecasts. Insurers may face increased claims exposure linked to project delays, cost overruns, and contract disputes if supply chain pressures are not effectively managed.
Investment in the construction sector is expected to continue over the next several years, but growth may slow once federal subsidies, tax credits, and funding for domestic manufacturing are fully allocated. From an insurance perspective, this period of heightened activity underscores the importance of proactive risk assessment, including builders’ risk, general liability, and professional liability coverage to protect against unforeseen losses.
The outlook for the next two to three years remains positive, with advanced manufacturing investments expected to sustain demand. However, insurers and brokers are urged to work closely with clients to address evolving risk factors. Geopolitical developments, rising tariffs, and workforce challenges could all affect project timelines, budgets, and overall risk exposure.
Ryan Powers, Senior Vice President and Head of Construction at QBE North America, emphasised the need for collaboration between construction companies and their insurers to safeguard projects. He noted that ensuring adequate coverage, providing safety and training support for new workers, and monitoring geopolitical and economic developments will be essential in mitigating potential losses and protecting both financial stability and project completion.