Executive Summary

In an era marked by both unprecedented opportunities and formidable challenges, the building commissioning industry stands at a crossroads. The Middle East, a nexus of transformation, and other regions, driven by increasingly stringent carbon reduction mandates, are witnessing a surge in infrastructure and property development. However, this growth is juxtaposed against a backdrop of possible acute skills shortages and profitability pressures within the AEC sector. This paper delves into the current landscape, highlighting the demand for high-performance buildings, the critical role of building commissioning, and the strategic moves by AESG to lead the industry forward.

The Big Picture

The global construction market, valued at an estimated USD 11.3 trillion in 2024, is forecasted to grow at a CAGR of 9.16% through 2031.¹ Saudi Arabia’s unawarded project pipeline alone stands at a staggering USD 1.1 trillion.² Yet, the industry is hampered by a workforce poised to lose over 40% of its professionals to retirement by 2031, creating a “war for talent” that demands immediate and innovative responses.³

Market Dynamics: Demand Meets Risk

In the AEC industry, there is a significant challenge with project delivery. According to the data, only 0.5%⁴ of large/mega projects are completed on time, within budget, and to the specified benefits. Furthermore, just 8.5%⁴ of large/mega projects are finished on time and within budget, and only 47.9%⁴ of large/mega projects meet their scheduled completion dates. These figures highlight a persistent problem of inefficiency and underperformance in the sector, highlighting that the vast majority of projects do not meet their planned objectives in terms of time, cost, and quality.

Compounding this problem is the industry’s struggle with profitability. With average net profits hovering between a minimal 0.5% to 3%⁵, companies find themselves in a precarious financial position. These slim margins are insufficient to support robust research and development or to attract and retain the skilled workforce necessary to improve outcomes. Consequently, AEC firms are at constant risk of financial failure, with many already experiencing significant losses early in project life cycles.

This combination of high risk, low reward, and a shortage of skilled professionals has led to what can be described as a ‘crisis of competence.’ The industry must navigate these choppy waters by not only addressing the immediate skills gap but also by fostering an environment conducive to innovation and sustainable growth.

The Top 3 Trends Impacting Building Commissioning 

Amidst broad challenges, several trends in building commissioning are crucial for the industry’s progress. The push for high-performance buildings, notably in places like Saudi Arabia, is spotlighting the importance of building commissioning. This practice is now essential for meeting “Green” building standards and is being integrated into the building codes of several countries, including Saudi Arabia. Building commissioning is vital for answering critical questions about a building’s performance, its environmental sustainability, and its carbon footprint.

Key Trends

1. Skill Shortages

The competition for skilled professionals in the AEC industry is fierce, making talent attraction, training, and retention critical. Building commissioning demands a mix of technical, systemic, and leadership skills.

The challenge lies in finding professionals with this comprehensive skill set, as the demand for experienced individuals outpaces supply.

2. Digitisation and IoT

Despite the influx of technology, construction’s labor productivity has only seen a modest increase of 1% annually over the last two decades, lagging behind the global economy and manufacturing sectors⁶. This slow growth occurs despite the AEC industry being overwhelmed with proprietary software solutions. Yet, the outlook remains positive, driven by two main factors:

The consolidation driven by the scale and complexity of mega-projects, which will likely
phase out less effective software solutions.

The decreasing costs of IoT devices for real-time monitoring, which are set to improve building performance visibility significantly.

During 2024 building commissioning will continue to benefit from IoT and BMS systems revealing building systems performance and the need to analyse and intervene. IoT will become a building commissioning tool. This, in my opinion, will lead to: 

• Building controls engineering becoming a foundational building commissioning skill set
• Data and algorithm analysis becoming necessary to building commissioning, particularly post occupancy
• Simplicity and persistence of systems performance becoming design and operational principles

With increased visibility into system performance provided by IoT, there will be a stronger emphasis on accountability throughout both the construction phase and the building’s operational life. This visibility is expected to enhance the quality of new construction and the maintenance of existing buildings, underlining the growing importance of digitisation and IoT in the building commissioning process.

3. Process and Standardisation

To efficiently manage large-scale projects, construction must adopt an industrial approach. This means prioritising efficiency, cost-effectiveness, standardisation, modular construction, off-site manufacturing, and digital processes. Such a shift requires adopting a reverse-engineering mindset, planning from the desired outcome back to the initial steps.⁷

Historically, the scale of a project directly influenced the number of personnel needed for building commissioning, turning it into a sheer numbers game. However, the current landscape of numerous mega projects combined with a shortage of skilled professionals demands a new strategy. The traditional approach is no longer viable; the industry must evolve to perform commissioning more efficiently with fewer but more skilled individuals.

This evolution involves a specific approach:

Detailed Planning
Start with a comprehensive definition of commissioning requirements from the design phase to ensure clarity and precision.

Performance Verification
Utilise sampling methods to confirm the performance of building systems effectively.

Standardisation
Establish a standardised commissioning process before tendering, tailored to the design of each project.

Incentive Integration
Incorporate clear incentives and penalties related to the commissioning process into contract documents to ensure adherence and quality.

Despite the historical resistance to change within the property industry, adopting these strategies is essential for delivering the promised high-performance mega projects.

Strategic Moves by AESG

In navigating the complex landscape of the building commissioning industry, AESG stands at the forefront, employing a multifaceted strategy that directly addresses the challenges faced by the AEC sector. Recognising the possible acute skills shortages and profitability pressures, AESG has cultivated a team of highly skilled professionals adept in the latest commissioning techniques. Our talent pool is not merely a workforce; it is a strategic asset that differentiates us in the marketplace.

AESG’s approach to cost management transcends traditional boundaries. With a keen understanding of the financial intricacies of mega projects, our cost management team employs innovative practices that ensure projects are delivered within budget without compromising on quality. By integrating rigorous financial controls and leveraging economies of scale, we successfully mitigate the risk of cost overruns, ensuring maximum value for our clients.

Data+, our proprietary Digital Handover and Asset Management platform serves as a testament to our commitment to technological innovation and excellence. This cloud-based platform revolutionises how project data is managed, turning it into actionable insights that drive project efficiency and effectiveness. With Data+, all project stakeholders gain real-time access to critical metrics, allowing for unparalleled visibility and control over the commissioning process.

By harnessing the power of Data+, AESG not only ensures that projects are completed on time and within budget but also guarantees that they meet and exceed the specified benefits. This innovative platform is instrumental in our ability to deliver high-performance buildings that align with stringent ‘Green’ standards and contribute positively to the built environment.

AESG believes our strategic initiatives and unique in-house skill sets are a statement of excellence in the building commissioning industry. By combining skilled expertise, astute cost management, and innovative technology, AESG is well-equipped to overcome the prevalent ‘crisis of competence’ and lead the pathway to a sustainable, high-performance future.

1. https://www.linkedin.com/pulse/construction-market-2024-latest-overview-anticipated-qel4f 

2. https://www.mordorintelligence.com/industry-reports/construction-sector-in-the-kingdom-of-saudi-arabia-industry 

3. https://www.autodesk.com/blogs/construction/2024-construction-trends-30-experts-share-insight/ 

4. How Big Things Get Done, Flyvbjerg & Gardner, 2023

5. DaveRogers,BuildingUK,27October2023 https://www.building.co.uk/comment/firms-going-bust-millions-lost-and-all-for-a- next-to-nothing-margin-who-in-their-right-mind-would-want-to-be-a-contractor/5125933.article

6. McKinsey 2017, https://www.mckinsey.com/capabilities/operations/our-insights/improving-construction-productivity 

7. How Big Things Get Done, Flyvbjerg & Gardner, 2023

How AESG can help

AESG is an International Consultancy, Engineering and Advisory firm committed to driving sustainability in the built environment and beyond. With the highest calibre leadership team in our field, we pair technical knowledge with practical experience to provide hands-on, bespoke strategic solutions to our clients.

We have one of the largest dedicated teams with decades of cumulative experience in sustainable design, sustainable engineering, fire and life safety, façade engineering, commissioning, digital delivery, waste management, environmental consultancy, security consultancy, strategy and advisory, cost management and acoustics. Our prestigious portfolio demonstrates our extensive capabilities and our ability to consistently deliver best in class solutions to some of the industry’s most complex technical challenges.

Adam Muggleton

Chief Technical Officer, AESG

Adam is AESG’s Chief of Technical Officer. He has worked on projects in 21 countries, held leadership positions at several firms and is an advocate for high performance buildings. Adam has a unique skill set derived from experience in property development, design team and project management plus building commissioning. Adam is passionate about promoting the concept of commissioning management as an effective project management tool, to hand over high performance buildings. Adam devises and delivers successful project, leadership and testing strategies that achieve optimum outcomes for all involved and affected. 

As well as being an industry philosopher, blogger and podcaster, Adam has contributed to several commissioning codes & guides. He also has unique knowledge and experience leading digital solutions for building commissioning and building information asset management.

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