Deloitte recently unveiled its “State of Digital Adoption in the Construction Industry 2024” report, offering a comprehensive analysis of the integration of digital and AI tools within the construction sector. The report encompasses feedback from 933 construction firms across six key markets: Australia, Singapore, Japan, India, Malaysia, and Hong Kong.
A significant revelation from the report is that 30% of Australian construction companies are actively trialing or utilizing AI software to enhance efficiencies and address critical industry challenges such as labor shortages, escalating material costs, and global supply chain disruptions. This trend underscores the growing reliance on AI to navigate and mitigate the multifaceted issues currently afflicting the construction landscape.
Moreover, the report highlights that 61% of the Australian firms surveyed believe AI will be instrumental in reducing costs. This sentiment is particularly pertinent given that the construction industry has seen a higher rate of companies entering external administration than any other sector in the current financial year. The anticipation of cost savings through AI adoption reflects the urgent need for innovative solutions to ensure financial viability and sustainability in the industry.
Looking ahead, an additional 33% of Australian construction companies plan to integrate AI into their operations. AI emerges as the foremost technology these companies are keen to adopt. The perceived benefits of AI among Australian firms are substantial: 76% expect it to improve efficiency, 61% foresee cost reductions, and 57% anticipate a boost in competitive advantage. Furthermore, 53% believe AI will enhance revenue and margins, 52% expect it to uncover new ideas and insights, and 49% predict it will strengthen client relationships. Additionally, 43% see potential in creating new revenue streams, while 42% believe AI will improve employee engagement.
David Rumbens, a Partner at Deloitte Access Economics, noted that if all companies with AI adoption plans proceed as intended, AI’s prevalence in the construction industry would rival that of data analytics or mobile apps. This projection underscores the significant potential for AI to become a cornerstone technology in the sector.
The integration of such technologies, however, is a complex endeavor. The construction industry in Australia is a substantial economic contributor, generating over $140 billion and employing more than 1.2 million people, according to the latest data from the Australian Bureau of Statistics. Despite its size and economic impact, 76% of Australian businesses report a technical skills gap related to digital technology, posing a significant barrier to widespread AI adoption.
Sumit Oberoi, Autodesk’s Senior Manager for Construction Strategy & Partnerships in Asia Pacific, emphasized the necessity for construction businesses to prioritize digital adoption strategically. Key recommendations include initiating small-scale pilot projects, appointing a digital champion, tracking diverse success metrics, building a digital ecosystem, and assessing AI readiness. Oberoi stressed the importance of data standardization and establishing a common data environment for operational efficiency as foundational steps toward successful AI implementation.
The report, produced in collaboration with Autodesk, highlights the integral role of AI and technology in navigating the challenges faced by Australia’s construction industry. Oberoi remarked that the combination of disruptive new technologies and a challenging business outlook necessitates a reevaluation of tools, workforce skill requirements, and interactions with clients and contractors.
Generative AI, in particular, has rapidly become a focal point for senior leaders, driven by the swift adoption of tools like ChatGPT, Midjourney, and GitHub Copilot. Oberoi noted that no industry is immune to the transformative potential of generative AI, which allows project proposals to leverage existing materials and pricing from similar past projects, rather than starting from scratch. This capability underscores the profound impact AI can have on enhancing efficiency and reducing costs in the construction sector.
In summary, Deloitte’s report elucidates the pivotal role AI is poised to play in revolutionizing the construction industry. By embracing AI, companies can not only address current challenges but also position themselves for future success, fostering a more efficient, cost-effective, and innovative industry landscape.
