Construction sector sees rapid rise in artificial intelligence

Construction sector sees rapid rise in artificial intelligence
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Autodesk and Deloitte have launched the latest edition of their joint report, the State of Digital Adoption in the Construction Industry 2024, highlighting the vital role of artificial intelligence in the years to come. This second iteration of the annual survey compiles insights gathered from 933 construction firms across six markets: Australia, Singapore, Japan, India, Malaysia and Hong Kong.

The report reveals that 30 per cent of Australian companies surveyed are currently trialling or using artificial intelligence (AI). By adopting AI, they aim to enhance operational efficiencies and help solve critical issues facing the construction industry, such as escalating labour shortages, soaring material costs and disruptions in global supply chains.

Additionally, 61 per cent of Australian construction companies surveyed express confidence in AI’s potential to drive down costs. This optimism is particularly noteworthy amid a concerning trend of more construction companies entering external administration than any other industry in the current financial year.

Sumit Oberoi, senior manager of construction strategy and partnerships, Asia Pacific at Autodesk, emphasised that with the challenges confronting Australia’s construction sector, the adoption of AI and technology is imperative for business success and cost reduction in construction.

“Disruptive new technologies combined with a challenging business outlook means that construction and engineering leaders in Australia and across Asia Pacific (APAC) are having to seriously rethink their tools, workforce skill needs and how they interact with clients and contractors,” said Oberoi. “Generative AI has exploded onto the agenda for senior leaders with the rapid adoption of tools like ChatGPT, Midjourney and Github Copilot.”

“No industry is immune from the transformative potential of this technology.

“Generative AI means that a new project proposal doesn’t need to start from scratch, instead leveraging material and pricing based on projects completed by the company with similar specifications.”

A further 33 per cent of Australian construction companies surveyed plan to use AI in future, with AI the most common technology they are looking to integrate into their operations. Australian construction companies surveyed said the benefits of AI will:

  • Improve efficiency – 76 per cent
  • Reduce costs – 61 per cent
  • Increase competitive advantage – 57 per cent
  • Increase revenue – 53 per cent
  • Improve margins – 53 per cent
  • Uncover new ideas and insights – 52 per cent
  • Enhance relationship with clients – 49 per cent
  • Create new revenue streams – 43 per cent
  • Improve employee engagement – 42 per cent

David Rumbens, partner at Deloitte Access Economics, suggested that if every company with intentions to implement AI follows through, AI could become as common in the construction sector as data analytics or mobile apps.

Integrating technologies like these into business operations will be no small feat. The construction industry in Australia contributed over $140 billion to the economy and employs over 1.2 million people, according to the latest Australian Bureau of Statistics data.

According to the report, 76 per cent of Australian businesses are reporting a technical skills gap related to digital technology. Oberoi said, “Priority areas for construction businesses to improve digital adoption include starting small by piloting projects, selecting a digital champion, tracking a range of success measures, building a digital ecosystem and asking whether your business is AI ready.”

“Put simply, construction companies need to get their ducks in a row now so they can implement AI in future years.

“The first step to successfully implementing AI is data standardisation and having an operational common data environment for teams.”

Additional key findings from the report across APAC include:
  • Across APAC, 30 per cent of construction companies are trialling or currently use artificial intelligence in their operations, with a further 39 per cent planning to use the technology in the future.
  • The critical role of technology in supporting business growth is increasingly being recognised. There was an increase in both businesses seeing new technology as assisting with new project work (up from 38 per cent to 45 per cent) and technology as improving internal processes (up from 37 per cent to 43 per cent).
  • Foundational technologies are the most commonly used, with data analytics (47 per cent), construction management software (43 per cent) and mobile apps (40 per cent) providing the backbone of construction operations.
  • Generative artificial intelligence is expected to become as pervasive in the construction and engineering industry as these foundational technologies, with 94 per cent of businesses now having plans to integrate artificial intelligence and machine learning into their businesses.

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