The construction sector is undergoing a fundamental transformation. Risks that were once viewed in isolation are now occurring simultaneously and reinforcing one another. That is the key conclusion of Zurich Insurance Group’s latest report, Beyond 2030: The Future of Construction, which draws on insights from 31 experts across underwriting, claims management, risk engineering, and construction.

Among the most pressing concerns are the effects of climate change. Extreme weather events and natural disasters rank as the industry’s most severe risks over the next five years, scoring 6.2 on a seven-point risk severity scale. Financial market vulnerabilities and labor market pressures follow closely behind.

Labor Shortages Intensify

The report paints a picture of a global labor market struggling to keep pace with rising demand for infrastructure and technology projects.

In the United States alone, the construction industry is expected to require an additional 349,000 workers this year. Southeast Asia faces a shortfall of 1.5 million skilled workers, while Australia is projected to face a deficit of more than 300,000 qualified employees by 2027.

The challenge is compounded by demographics. A significant number of experienced workers are expected to retire in the coming years. In the U.S., roughly one in five construction workers is projected to leave the workforce by 2031, taking critical expertise with them.

Cyber Risks Continue to Rise

At the same time, the industry’s digital vulnerability is increasing rapidly.

Nearly four out of five architecture, engineering, and construction firms have experienced cybersecurity incidents over the past two years. On average, companies reported 226 security incidents annually, representing a 41 percent increase year over year.

Despite the growing threat, only around 1 percent of global cyber-related losses are currently insured, leaving contractors and project owners exposed to substantial financial risks.

Billion-Dollar Projects Increase the Stakes

The trend is particularly evident in large-scale capital projects.

According to the report, major projects exceed their budgets by an average of approximately 80 percent and are delivered more than 50 percent behind schedule. At the same time, project values are rising sharply.

The average data center project is now valued at approximately $3 billion, compared with just $150 million five years ago. The rapid expansion of artificial intelligence infrastructure is a key driver of this growth, concentrating risk in increasingly complex and capital-intensive projects.

Insurability Emerges as a Leading Indicator

For Zurich, the report highlights a critical shift: project insurability is becoming a leading indicator of economic viability.

Projects that cannot obtain insurance coverage—or can do so only at prohibitive costs—often face significant obstacles in securing financing and moving into execution.

«If a project is not insurable, it will not be financed,» Kelly Kinzer, Global Head of Construction & Surety at Zurich, said in the report. As a result, risk considerations must be embedded during the design and planning phase rather than addressed only once construction is underway.

The report argues that project owners, investors, and developers should begin treating insurability as a core metric alongside cost, schedule, and safety considerations. In an era of increasingly complex projects and converging risks, insurability may become one of the most important determinants of project success—or failure.