Deloitte has released the State of Digital Adoption in the Construction Industry 2024 report, which examines the adoption of digital and AI tools by construction companies. 

The report reveals insights from 933 construction firms across six markets including Australia, Singapore, Japan, India, Malaysia and Hong Kong.

The report finds 30 per cent of Australian companies surveyed are currently trialling or using AI software to increase efficiencies and help to solve major issues facing the industry, including increased labour shortages, higher material costs, and global supply chain disruptions. 

Additionally, 61 per cent of Australian construction companies surveyed said AI will help them to reduce costs amidst more construction companies entering external administration than any other industry in the financial year to date. 

The report finds that a further 33 per cent of Australian construction companies plan to use AI in the 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

Partner at Deloitte Access Economics, David Rumbens, said, “If all companies with plans to adopt AI do so, AI will have a similar level of prevalence in the construction industry 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. 

Mr Oberoi said that 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 their 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.” 

The report is produced in partnership with Autodesk. Autodesk Senior Manager, Construction Strategy & Partnerships Asia Pacific, Sumit Oberoi, said that with the challenges facing Australia’s construction industry, AI and technology adoption has become integral for businesses to succeed and to help reduce the costs of construction. 

“Disruptive new technologies combined with a challenging business outlook means that construction and engineering leaders in Australia and across Asia Pacific are having to seriously rethink their tools, workforce skill needs and how they interact with clients and contractors,” Mr Oberoi said. 

“Generative AI has exploded onto the agenda for senior leaders with the rapid adoption of tools like ChatCPT, 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.” 

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