AI in Construction – The Next Frontier

Although the construction industry is no stranger to evolution, it has been notoriously slow in adopting one of latest trends: software. Still bound by manual clerical work and outdated processes, construction has been left far behind by other industries. This article explores the potential of cutting-edge AI in construction.

Construction has been largely considered as a legacy sector inundated with Excel spreadsheets and paper documents. The emergence of Artificial Intelligence (AI) and Large Language Models (LLMs) presents a golden opportunity for the industry to make up for lost time in tech adoption. With its transformative potential, AI in construction can take a giant leap forward in terms of efficiency and productivity.

Although the $13 trillion sector has trailed other industries by 46% in technology spending and adoption, E&C companies are now gradually increasing their CAPEX for technology and software. According to a recent study by ResearchDive, the market size was $496.4 million globally for artificial intelligence in the construction industry and is expected to grow at 34.1% CAGR and reach $8.5 billion by 2031.


Realizing the need for Construction Software

Most of the legacy companies believe in the motto, "if it's not broken, don't fix it". Traditional firms have managed to stay successful and produce quality output by adhering to the basic loyalty and trust mechanism. However, these same firms had to grapple with the reality of having to deal with Artificial Intelligence in the post-COVID era. When Covid-19 hit the US, builders were struggling to find skilled labor, monitor the workflow and generate cash flow that resulted in losses to the tune of $61 billion, wiping out two years of GDP gains and four years of job gains.

To address these shortfalls, many companies are beginning to champion the effort to build novel solutions that tackle the hurdles across various stages of the construction lifecycle. Effective communication and document management systems are pivotal for any construction project. AI-powered document management systems can streamline day-to-day operations by reducing the time spent to search, retrieve, and archive files and documents. In a study conducted by FMI back in 2018, it was found that poor project data and miscommunication on projects is responsible for 48% of all reworks in construction in the U.S and had cost a total of $31.3 billion in rework, just that year.

Understanding AI in Construction

With the latest buzzword being ‘AI’ these days, let’s first discuss what it really is.

In simple terms, Artificial Intelligence (AI) is a set of computer programs that can help an app ‘imitate’ human behavior when it comes to completing tasks or making the best decisions. Coded by humans, most AIs are programmed to learn stuff over time by observing human behaviour within apps and soon take up those tasks themselves, saving users a lot of time in the process.

For instance, everyone knows the importance of safety at a construction site and how each site can have unique challenges. AI can look at historical safety data and current site conditions to predict potential safety risks. It can then recommend preventive measures, from reallocating resources to scheduling safety drills, ensuring a safer work environment. As users, you are now not only free from manual reallocation, but you also get alerts of safety concerns ahead of time so that you can implement preventive measures effectively and ahead of time.


How AI is used in Construction - a glimpse

 New age AI solutions provide a seamless medium for field crews to create forms and submit reports in minutes through intuitively designed mobile applications, saving them hours of manual work. Let's explore some of the potential use cases:

1. Document Management: Construction projects generate an avalanche of documents - drawings, permits, contracts, and more. Misplaced documents can lead to costly delays and errors, further affecting the project's timeline and budget.

With AI, documents can now be categorized, tagged, and retrieved efficiently on demand.. They also facilitate version control, ensuring that all stakeholders access the latest document revisions and can even extract relevant data from documents for analysis and reporting.

2. Data Analytics: Construction projects can generate vast amounts of data, however deriving actionable insights from this data can be challenging. Manual data analysis is time-intensive and prone to human errors. By leveraging AI, analytical models can be developed that offers construction teams a competitive advantage to identify trends, predict potential project delays and monitor equipment supply chains.

3. Invoicing and Financing: According to a recent study by Pymnts, 37% of US construction firms had to delay or halt their projects due to late payment and wage issues, last year. Besides that, slow payments comprise 12% of total construction costs, with one in three contractors forced to finance cash flow needs and add carrying costs like interest. General contractors usually operate with razor thin profit margins and these delays results in operational losses to them. To eliminate these pitfalls, AI based solutions can use smart data extraction to automate and produce error-free invoices. Machine learning models can provide critical insights based on client’s payment behavior and reduce their DSO (Days Sales Outstanding) by a large extent.

AI in construction is here to stay

AI-driven solutions offer construction companies a competitive advantage by streamlining operations and enabling them to deliver projects more efficiently and cost-effectively. Automations do wonders for worker productivity and could effectively free up hours of manual work. Influx of capital allocation for construction-focused software offerings will continue to grow that will drive a net acceleration in the use of technology in coming years. The time is ripe for construction companies to adopt AI in their day-to-day activities.

What next? A deep dive into AI solutions for construction management

What you read so far is but a glimpse of how AI can operate and make construction more efficient. But we’d like to show you how much can be done using AI in various key functions across the execution phase. Over the coming weeks, we will take a closer look at how AI can improve various functions within construction management. From proactively predicting project delays to automatic data extraction, we have a wide array of exciting use cases to talk about. Stay tuned as we delve deeper into the applications of AI in construction. Don't miss our upcoming deep dives!


August 11, 2023