The 2024 ΒιΆΉΚΣΖ΅/FMI Study highlights key risks in the construction industry. Based on responses from ΒιΆΉΚΣΖ΅'s in-house risk managers workgroup (collected Dec. 2023 β Jan. 2024), the top concerns include labor shortages, design issues, changes in insurance terms and costs, project delays or cancellations, and changes in contract language. However, one of the most alarming trends highlighted by the study is the uptick in subcontractor defaults. Seventy percent of respondents are seeing an increase in subcontractor defaults compared to one year ago, with nearly half reporting firsthand experience of project disruptions due to subcontractor defaults. Root causes behind subcontractor distress include financial instability, lack of skilled labor, and quality issues -- especially affecting electrical, plumbing, and concrete trades. In response, construction risk managers are enhancing subcontractor prequalification measures, including more thorough financial and staffing evaluations, seeking out new subcontractors, and increasing review frequency.
ΒιΆΉΚΣΖ΅βs Risk Management and Specialty Contractors Committees are coordinating to publish an update to βΒιΆΉΚΣΖ΅ Best Practices Checklist on Preventing and Managing the Risk of a Subcontractor Default.β ΒιΆΉΚΣΖ΅-endorsed offers best practice standard statement of qualifications forms, including editions to prequalify , , , and . The allows the use of ConsensusDocs administrative documents for one year.
All past ΒιΆΉΚΣΖ΅-FMI risk reports are here: Hot Topic Resource Library | Associated General Contractors of America (agc.org). For more information, please contact ΒιΆΉΚΣΖ΅βs Leah Pilconis at leah.pilconis@agc.org.