The year 2020 presented unique challenges within the construction and design industry. Overall spending last year was down compared to its 2019 results, which were attributable to the temporary stoppage of ongoing projects and the delay in finalizing future project starts.
As project backlogs for 2021 are forecast to decrease by 8% -10% compared to the previous year, this trend is expected to continue into 2022 as commercial projects start and size increase. The effects of rising materials cost and limited availability contribute to the current marketplace, pushing organizations to consider:
Operational and economic recovery efforts from COVID-19
Financial and profitability pressures
Implementation of advanced technology and automated processes for efficiency
The increase in projects also brings forth changes in workers' compensation trends. Guaranteed cost risks experienced flat pricing during the fourth quarter of 2020, while early 2021 renewals showed a positive median rate change for the first time in five years. As workers' compensation losses related to COVID-19 remain ongoing and continue to evolve, individual states continue to create specific workers' compensation presumption acts, which place the burden of disproving exposure-related losses upon the employer.
Additional trends impacting general liability, automobile, excess liability, and additional coverage within the construction and design industry are leading organizations to assess placement strategies, wrap-up programs, subcontractor prequalifications, and more. Learn more about trends impacting the industry by downloading our 2021 Construction and Design Market Update (opens a new window) for Lockton's insights on strategic approaches for maneuvering through the current marketplace.