There is a bit of a "chicken and egg" issue when adopting artificial intelligence (AI) in the construction industry. While most survey participants and thought leaders acknowledge AI's tremendous potential to improve efficiencies, take pressure off employees by allowing them to delegate more banal and rote aspects of the job to technology, and a sense that bidding and contracting obstacles can be mitigated in the near-term by AI adoption, stubborn barriers remain and have hindered adoption rates. While some of those barriers may be more psychological, experts say others are grounded in day-to-day reality.

For example, a comprehensive new survey from Deloitte and Autodesk found that three common barriers that businesses need to overcome when trying to leverage AI are:

  1. A lack of digital skills among employees (cited by 42% of businesses), with this barrier more likely to impact large companies,
  2. Technology is too expensive, and
  3. A lack of budget allocated to technology.

There’s an irony here in that the benefits of AI appear to be tantalizingly close yet remain out of reach in terms of regular usage.

As an example, when asked by Construction AI how AI might help alleviate the chronic work shortage in the construction industry, Ryan Meitl, CEO of Rivet Work, reminded of its potential and limitations: "AI is not going to be able to pull wire or bend conduit (except maybe in the factory with some robots)."

“I think where you’re going to see it having the biggest impact ... is enabling businesses to do more with less," he said. Meitl added that AI could boost productivity and efficiency and reduce job site waste. "I think that's the near-term answer." He also thinks AI will be helpful on the contract and bidding end.

Looking further down the road for ways AI can help in the field, “I think it’s going to be more around efficiencies ... which can be massive.” For example, “just [improving] workforce management practice can [translate into] a significant number of points on your gross margin. If AI can amplify that a little bit more, you are going to get more out of it,” he said.

The Deloitte/Autodesk survey of 993 construction firms in Australia, Japan, Singapore, India, Hong Kong and Malaysia affirms that businesses with higher digital adoption rates are already seeing positive impacts on project performance. Adopting one additional technology led to a 0.75% increase in total projects delivered under budget and a 0.5% increase in the share of projects delivered on time after accounting for a business' size, years in operation and location. These benefits extend to financial performance as well. According to the survey, additional technology correlates with a one percentage point increase in profit growth and a 1.4 percentage point increase in revenue growth over the past year. For a business with $100 million in revenue and $20 million in profit, adopting an additional technology is associated with an increase in revenue of $1.4 million and a $200,000 increase in annual profit.  

Growing Recognition of Value

The described adoption conundrum is manageable. The survey report found a growing recognition among businesses that AI is worth the effort. "We find the critical role of technology in supporting business growth is increasingly being recognized," said the report "State of Digital Adoption in the Construction Industry 2024.”

For example, it found an increase in both businesses seeing new technology as assisting with new project work (up from 38% to 45%) and technology in improving internal processes (up from 37% to 43%). According to the report, construction companies use foundational technologies the most, followed by data analytics (used by 47% of businesses), construction management software (43%) and mobile apps (40%), providing the backbone of construction operations.

Generative AI will likely become as pervasive in the construction and engineering industry as these foundational technologies, with 94% of businesses now planning to integrate AI and machine learning into their business.
However, it's also important not to adopt technology for its own sake. Having an overarching strategy--finding the best ways for AI technology to help reach specific business goals--is vital.

“We don’t believe in technology shopping. … now and then, a new technology comes on the block, and people run behind it. Instead, our philosophy has been that you identify a technology that solves the problems you currently face," said Sagar Gandhi, Head of Strategy and Business Excellence, Shapoorji Pallonji, in the report.

 

The full report is available for download from Deloitte by providing your professional contact information.