Photo by Joe Holland on Unsplash
BY CLAIRE WILSON AND MODUPE AKINNAWONU, SITELINE
Claire and Modupe spoke on artificial intelligence in construction at the 2024 Business Summit. They provide the article below for those who were not able to attend.
Artificial intelligence (AI) has rapidly evolved from a futuristic concept to an increasingly prevalent reality across industries. In construction, AI promises to revolutionize manual processes, enhance efficiency, and drive innovation. As subcontractors navigate this evolving landscape, understanding AI’s practical capabilities, current impact, and future potential is crucial for using it in a way that benefits your operations.
Understanding AI
AI is often surrounded by a lot of hype, making it difficult to understand what it is. Here’s a quick refresher: AI refers to the ability of machines to mimic human intelligence and perform tasks that typically require human-like cognition, such as learning, problem-solving, and decision-making. AI particularly excels at processing vast amounts of data, recognizing patterns, and making predictions based on that data.
Through these capabilities, most people leverage AI to automate repetitive tasks, optimize resource allocation, and provide valuable insights that inform strategic decisions. (More on these practical benefits later).
Moreover, AI is everywhere. Whether you realize it, it has been a part of our everyday lives for years. Some examples of AI in action include:
- Personalized article recommendations on websites
- Tailored show suggestions on streaming platforms like Netflix
- Spam email detection and filtering
- Targeted advertising across websites
All this to say, AI is here to stay — and has already assumed a central role in shaping our professional and personal experiences. Given its prevalence, it’s hardly surprising that AI is also making inroads into the construction industry.
How AI is Already Changing the Game
Though traditionally slower in adopting new technologies, the construction industry in the U.S. and Canada is currently undergoing notable digital transformation. Procore’s 2023 How We Build Now report shows that over a quarter of construction business owners, general contractors, and specialty contractors are already using AI or machine learning technologies, and an additional 30 percent plan on adopting these technologies within the next year.
The report further suggests that advancements, like refined large language models, will spur greater AI adoption. Mordor Intelligence’s research supports this claim, forecasting the growth of AI’s market share in construction from $3.21B in 2023 to $9.53B by 2028 at a compound annual growth rate of 24.31 percent.
From a global perspective, AI holds the potential for a significant impact on the construction industry, which is worth more than $10 trillion annually and constitutes 13 percent of the global GDP. According to McKinsey, embracing digitization could enhance construction’s market capitalization by $1.6 trillion yearly, in addition to accelerating its year-over-year labor productivity growth (which is roughly 1.8 percent behind the total world market’s).
Hence, adopting AI is not merely beneficial; it’s essential for the construction industry to remain competitive globally.
AI Benefits and Use Cases in Construction
Specialty trade contractors continue to face significant external hurdles stemming from ongoing volatility in the construction industry and broader economy (e.g., supply chain disruptions, rising material costs, and labor shortages). To combat these headwinds, 32 percent of owners, GCs, and subcontractors cited the need for new technology solutions — specifically ones that can drive operational efficiencies and tighten cost controls — as crucial (Procore).
This aligns with the growing recognition of AI’s potential to revolutionize the construction sector through:
- Optimized project timelines: AI analysis can more accurately predict proposed schedules by considering factors like past performance, seasonality, customer requirements, project complexity, and dynamic supply chain conditions. This enables more realistic timeline forecasting and proactive mitigation of potential delays.
- Effective and proactive cost management: AI models can provide granular insights into project cost structures, factoring in variables such as material pricing fluctuations, labor availability, and risk factors. This facilitates tighter cost control, early identification of budget overruns, and data-driven decision-making to maximize profitability.
- Increased productivity and resource optimization: By automating repetitive tasks like forecasting, reporting, and subcontractor accounting, AI frees up human resources to focus on high-value activities like strengthening customer relationships and strategic planning, which improves overall productivity and efficiency.
- Significant time savings: AI drives efficiency across various workflows, addressing a critical need in the construction industry, which wastes $30B to $40B annually due to labor inefficiencies (Construction Dive). For example, AI-powered solutions can streamline time-consuming processes like generating custom GC forms or manually scouring spreadsheets for anomalies.
- Enhanced visibility for data-driven decisions: AI surfaces relevant data at the right time, enabling faster and more informed decision-making. For example, AI-powered drones can assess construction progress and generate real-time 3D renderings, providing unparalleled visibility into project status and facilitating proactive course correction.
- Improved work-life balance: By effectively combining AI capabilities with human expertise, employees can redirect their efforts toward strategic, higher-value projects that drive organizational growth. This synergy between technology and talent leads to enhanced work-life balance and increased job satisfaction within the workforce.
Tips for Choosing the Right AI Solution
As subcontractors explore AI solutions, it’s essential to carefully evaluate their unique needs, resources, and organizational readiness. A well-planned and strategic implementation can unlock AI’s full potential while ensuring a seamless integration with existing workflows and processes.
Here are some tips for making an informed decision:
- Define your goals: Clearly articulate the specific challenges or opportunities you want to address with AI and align your search accordingly.
- Evaluate data readiness: Assess the quality and availability of your data and data management practices to ensure they can support your chosen AI solution.
- Consider integration needs: Look for solutions that can seamlessly integrate with your existing software and hardware ecosystems, minimizing disruption and maximizing value.
- Account for scale: As your company matures, consider solutions that can scale alongside its growing needs and evolving requirements, future-proofing your investment.
- Prioritize user experience: Choose solutions with intuitive interfaces and robust training resources to facilitate user adoption and maximize the return on your investment.
- Partner with experienced vendors: Work with AI vendors that have a proven track record in the construction industry and can provide ongoing support and guidance.
- Implement change management strategies: Invest in workforce training and communication to address concerns, build trust, and ensure a smooth transition to AI-augmented workflows.
- Start small: There are many AI solutions on the market today, so it’s important to remain focused on your most pressing needs. This allows you to gain experience, refine processes, and build confidence before expanding your AI footprint.
AI holds great potential to boost efficiency and productivity in construction, but it’s not a substitute for human intelligence. The ideal approach is to cultivate a symbiotic relationship where AI enhances human capabilities. By assigning repetitive, data-heavy tasks to AI, subcontractors can focus on more complex, creative, and strategic tasks that leverage human strengths, leading to greater efficiency, innovation, and competitive edge. Those who proactively navigate this transformation will be well-positioned to thrive in the rapidly evolving construction landscape.
Claire Wilson is the head of construction solutions at Siteline. Previously, she was a project manager on major projects at Tishman Construction in New York City, where she worked on projects like Hudson Yards and JP Morgan’s Corporate Headquarters. She is an active member of CFMA San Francisco and has spoken at numerous regional and national construction conferences.
Modupe Akinnawonu is a senior product manager at Siteline. Previously, she was a senior product manager at Peloton, and a product manager focused on mobile apps at The New York Times. She has spent the last two years living and breathing construction finance and is an active member of the CFMA New York City chapter.