About a third of all construction projects fail, underperform, or face budget and time shortcomings every year. More surprising is the fact that nearly 70% of projects fail to deliver what was promised to customers.

The major cause of these failures is not far-fetched. Here are three common reasons:

Inadequate financing.

Many contractors are always trying to cut costs. This makes using second-rate materials attractive. Ironically, in a successful project, you save $4 in repairs, retrofits, and reconstruction for every dollar properly spent.

Also on financing, according to a McKinsey study, 80% of large construction projects exceed their budgets. A major cause of this is the poor management of the budget.

It is part of the project manager’s job to do a proper cost analysis, taking into consideration possible inflation.

Poor Planning

If planning was just creating a construction schedule, many projects that failed would have been successful. It is vital to conduct a risk assessment, define a management strategy, develop site-specific safety plans, establish contingency plans, site logistics, and line up the delivery of materials and equipment.

Poor planning will ultimately result in poor execution. This is why you need to invest time and effort in planning and understanding the scope of work, specifications, and client’s expectations.

Ignoring red flags

It is easy to overlook minor issues that can snowball into major concerns and delay the project. Delays lead to an increase in costs and invariably the project exceeds the budget.

It is the job of the project manager to spot these issues early and troubleshoot them as soon as possible.

The project manager should regularly meet with team members to discuss new developments and ways to tackle issues that might be arising.


Fortunately, robust management practices increase the chances of a project succeeding. These project management practices drive cost-saving and risk reduction in a project. So, it is possible to avert construction project failures. However, proper planning, proper financing, and strict attention to detail will lead to an increase in successful projects.