ECIs 23rd Annual Conference 2012 The European Construction Industry

- Facing the Global Challenges

26 & 27 April 2012 Hilton Hotel, Dusseldorf

Global Challenges Facing the US Construction Industry

Glenn F. Doran ConocoPhillips, General Manager Asia Pacific - Project Development Chair, Construction Industry Institute

The Challenge
Organization Readiness Vs. Project Environment

Organization Readiness
Will your organization be ready to successfully execute construction projects in the future?

Only if you are ready to address: Changing workforce demographics Increasing project complexity and risk Industry Image
4

Workforce
Average age of workers is changing Smaller, less educated, incoming labor pool National mobility decreasing Increase in employer changes by individuals Since 2008 many experienced workers have left the industry
From 2010 to 2020 theUS 65+ Population Will Grow Rapidly 65+ 55-64 14 6.5 -3.9 1.6 3.3 -1 -10 -5 0 5 Millions of People 10 15 20

Age Group

45-54 35-44 24-34 16-24

Source: CII presentation Nov 2011, Preparing for the New Normal by Dr. Thomas Stinson, Lead Economist, State of Minnesota

Industry Image
Fewer people are entering the construction industry Fewer professionals choosing construction management path Re-create construction as a career path for younger generations

Construction sectors need to improve communication of opportunity and importance

Project Execution
Economies are picking up in the US and around the world Capital spend is forecast to increase worldwide creating opportunities across many industries New projects are increasingly more complex Project risk has increased
44% US Construction Spending 12 Month % Change by Industry

14%

12% 4% 2%
Educational

2%
Highway and street

-1%
Health care

-1%
Office

-2%
Communication

-3%
Recreation

-6%
Waste disposal

-10%
Transportation

Manufacturing

Commercial

Nonresidential

Power (Oil & Gas Pipelines)

Data Source: AGC of America, December 2011

Project Complexity
Challenged to build bigger than ever before Accomplish what hasnt been done before More technologically advanced facilities New Location issues availability of infrastructure Global projects with international partnerships Financing issues Local and Global Labor markets impact Layers of supplier quality
New Technology Political Stability Financing

Larger Scale Scope

Construction Project

Global Locations

Supplier Quality Changing Labor Markets

Stakeholder Management

Opportunity through Productivity

Construction Industry Fact:

Value of construction work done per employee in Heavy and civil engineering construction subsector increased 64% between 2002 and 2007.
Source: US Census

Increasing Productivity Has Two Parts

QUALITY

INNOVATION

Source: CII presentation Nov 2011, Preparing for the New Normal by Dr. Thomas Stinson, Lead Economist, State of Minnesota

Opportunity through People

Companies that can leverage their staff can be successful Recruiting, Training and Re-creating experienced teams Recruiting has changed

Retention

Recruitment

Retraining

Source: CII presentation Nov 2011, Preparing for the New Normal by Dr. Thomas Stinson, Lead Economist, State of Minnesota

10

Application at ConocoPhillips
Retention
TALENT MANAGEMENT TEAMS

Recruitment

Retraining

11

Meeting the Challenge

Knowledge Creation
Research to define best practices, breakthroughs, and industry norms Research, Academic and Breakthrough Strategy committees

Knowledge Dissemination
Research publications, implementation guides, educational materials, workshops and conferences Implementation Strategy and Professional Development committees

Knowledge Assessment
The impact of CII practices through benchmarking and metrics Benchmarking & Metrics committee

Knowledge Management
Organization and assessment of the relevance of the 500-plus CII documents and publications Knowledge Management committee

12

European Construction Institute www.europeanconstruction.eu