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Risk rises slightly for construction sector

World Cement,

Based on the 1Q15 update of Timetric’s Construction Risk Index (CRI), risk has edged up marginally across the 50 countries that are analysed, with the unweighted average score rising from 41.02 in 4Q14 to 41.08.

This was driven by a slight increase in risk in advanced economies that offset a decline in the average level of risk across the emerging markets. However, risk in advanced economies is still much lower than in emerging markets, with the average score for advanced economies standing at 33.37 in 1Q15, compared to 43.38 in emerging markets.

The CRI provides an analysis of current conditions and a forward-looking assessment of general and specific risks that could prevent projects from being executed, result in major disruptions to projects, or ultimately lead to project failures. It is based on five dimensions of risk, each with varying weights: market risk; operating risk; economic risk; financial risk; political risk.

Only three countries in the CRI, Sweden, Singapore and Switzerland, have the top rating of A1, with the 10 following receiving a rating of A2. The only changes in rankings for A1 and A2-rated countries in the 1Q15 update was that of Hong Kong – moving above Canada into sixth place.

Russia has continued to slide down the rankings. In the 1Q15 update Russia’s score dropped to 60.09, putting it in 45th place. In contrast, in 1Q14 it was ranked in 40th place with a score of 52.31.

A total of 29 countries have suffered a deterioration in their risk profiles.

“There are moderately positive signs that the construction industry in countries in the Eurozone has now passed rock bottom. But Greece’s woes persist, with the election victory for left-wing opposition Syriza in Greece's January 2015 national elections creating much uncertainty, not only in the country itself but also in the wider region,” says Sina Zavertha, Economist at Timetric's Construction Intelligence Center.

Adapted from press release by

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