Can Asia excel at engineering resiliency amid today’s heightened risks?
Increasingly, projects throughout the region are being delayed or postponed due to the materialisation of multiple risks. However, solutions to these risks exist.
Just 18 months ago, the conversation about construction and engineering risks was in a different place. Back then, rising frequencies of natural catastrophes across the region was the primary concern among the industry’s community.
Today, the list of noteworthy risks has widened. Natural catastrophes remain a top concern, but other issues are leading to a significant rise in project delays and cancellations: reportedly, 40% of Southeast Asian projects are behind schedule.
Furthermore, that projects are being held up or called off is creating additional risks as well: large construction projects are alleged to run 80% over budget on average. The types of projects affected include renewable and low carbon projects, transportation infrastructure, telecommunications facilities, and other critical infrastructure assets like water and waste management plants.
What risks are reshaping Asia’s construction and engineering scene; what perils emanate from these; and critically, how can the industry adapt to ensure projects are completed and remain safe and robust?
Trade and supply chain disruptions; labour shortages
Of the many disruptive forces transforming Asia’s construction and engineering space today, tariffs have probably been the most impactful. Import duties imposed on all trading nations in 2025 varied between 10% to 147.6%. Project builders have experienced significant price spikes across raw materials and finished goods, which in turn drove up other costs, and made projects more expensive and in many cases, they made projects unaffordable.
To counter supply chain disruptions, project investors and builders have turned to materials and equipment from elsewhere. But the redrawing of supply chains carries with it numerous challenges. Notably, it takes time to source new suppliers, the process of which has since been a major contributor to project delays across Asia. Moreover, in many instances, project developers have settled for substandard substitutions. Doing so therefore increases the risk of structural and mechanical failures, as well as safety hazards.
Project delays have led to severe labour and talent shortages. Typically, workers are hired over a specific timeframe, and once this ends, they move on to another opening. However, when a project overruns timewise, these usually experience a shortage of skilled workers.
On top of this, countries like Japan are implementing stricter language requirements, and are tightening their border controls for undocumented workers. While Southeast Asian countries including Malaysia, Vietnam, and the Philippines have tightened employment-based immigration, while implementing stricter labour market testing and eligibility requirements to protect local jobs. All of which is contributing to a shortage of workers to build Asian engineering projects.
Practical solutions
Managing and preventing project delays, and mitigating cost increases, starts with clear planning. Developers should create comprehensive schedules that include all milestones, and incorporate buffer time for unforeseen disruptions. To counter the delays associated with supply chain disruptions, they can take a more strategic approach to procurement, ordering with long lead times, while maintaining strong relationships with multiple suppliers, old and new, from different geographies.
To maintain high quality supplies, developers should thoroughly vet partners and subcontractors to make sure that structures, components and machinery are to standard, and that no corners are cut. Indeed, the issue of building to code is an acute one: all too often builders and operators overlook one or more standard, which in turn becomes problematic further down the line in one way or another. At QBE, we support the work of the International Finance Corporation (IFC) on its Building Resilience Index (BRI), which encourages developers to construct and maintain more resilient projects through adherence to the highest of industry standards worldwide.
While there is no short-term fix for Asia’s engineering labour shortage, over the mid-term however, builders and operators can implement a range of strategies to alleviate the issue. One is to upskill and reskill the existing workforce and encourage workers to enter the sector. This can be done in partnership with constructors and operators, as well as local manpower authorities. Another is further embrace automation and technology, albeit that this may further raise costs as well as require more training and upskilling among current workers.
Insurance: Playing its part
The private sector can play a key role in supporting projects. In QBE’s instance, we not only support the IFC’s strive to ensure projects are built to the highest of construction and maintenance standards; we are also rewarding projects that aspire to be more resilient, by offering more favourable insurance coverage.
To this end, there are numerous polices insurance companies like QBE extend to projects. These include:
Contractors’ All Risks (CAR), protecting construction projects against physical damage to works, materials, and equipment, alongside third-party liability for injury or property damage.
Erection All Risks (EAR) covers material damage, third-party liability, and testing risks during the assembly, installation, and commissioning of machinery, plants, and industrial equipment.
Machinery Breakdown Insurance covers sudden and unexpected physical damage to machinery.
Contractor’s Plant and Machinery (CPM) coverage protects construction equipment like cranes and excavators from damage while in use, in storage, or during maintenance.
Electronic Equipment Insurance protects damage to electronic hardware and data, including increased costs of working following an accident.
Advanced Loss of Profits (ALOP) protects against financial losses, such as project delays or interruption of business income, following an insured damage event.
Beyond the provision of insurance policies to construction and engineering companies, there is a role for insurers to advise on current building and maintenance best practices; present insights on local and international building codes; and to inform customers of current industry trends.