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June 10, 2021updated 11 Nov 2022 12:47pm

Tech spending in construction to rise as activity picks up again in the industry

In the context of technological innovation, the construction industry is to increase its tech spending after the Covid-19 challenges.

By GlobalData

While companies in other industries are often part of a continual race for innovating in tech faster than their competitors, attitudes in the construction industry are often thought to reflect a desire to maintain the status quo, provided existing processes are considered satisfactory by clients and management. Among the challenges for companies in the construction industry when it comes to investing in new technology is that they find there are limited financial gains in the short term and this makes it difficult to justify making financial commitments when operating margins are tight. This challenge has become even more acute amid the Covid-19 pandemic, which has resulted in a severe downturn in construction activity globally.

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Internet of Things set to transform the construction industry

The Internet of Things (IoT) is proving hugely beneficial to the construction industry, allowing different assets and people to be monitored and accounted for across a traditionally fragmented industry. As a result, companies that invest in IoT now promise to make long-term gains in the industry. According to GlobalData forecasts, spending on IoT in construction will reach $9.6bn by 2025. For an industry that has large sites to manage, strict project timelines, hazardous working conditions, and tight profit margins, IoT can create a manageable view of construction sites for project managers, streamline operations, and protect workers. In addition, it allows real-time data streams of assets, automates time-consuming tasks, and ensures employee safety and productivity. IoT integration with equipment manufacturing also has rich advantages for asset monitoring sensors. This, combined with artificial intelligence (AI) can help forecast materials and workers needed during the procurement stage and assist in forecast financing. Read GlobalData’s whitepaper to find out more, including information on:
  • IoT value chain
  • Market size and growth forecasts
  • Mergers and acquisitions
  • Leading IoT adopters in construction
  • Specialist IoT vendors in construction
Don’t get left behind – find out how IoT can fortify your operations and make investments now.
by GlobalData
Enter your details here to receive your free Report.

However, following a difficult year for contractors in 2020, there are signs of growing optimism in the industry with the pick-up in global economic activity and this is expected to support an upturn in investment. This is reflected in GlobalData’s latest Covid-19 industry survey, in which 34% of construction companies responded that they strongly agreed that technology spending will increase as a result of Covid-19.  While a further 28% agreed, only 19% of respondents disagreed or strongly disagreed and the remaining 19% were neutral. With a large backlog of projects in the pipeline coupled with labour and raw materials shortages that have led to price pressures, companies are likely to be looking to increase spending on technology to deal with the near-term fallout from the pandemic and to also position themselves to deal with any future challenges.

The industry has been making use of construction-specific technologies such as building information modelling (BIM) and 3D printing. Drones, or unmanned aerial vehicles (UAVs), have also become increasingly popular in the construction industry. The industry is now reported to be one of the largest drivers of growth in the commercial drone sector. There are a number of potential uses for drones within construction, such as the ability to survey projects through the use of drones in comparison to more traditional means of surveying.

While the uptake of artificial intelligence (AI) technologies has been slow, AI has the potential to deliver tangible benefits at every step of the construction value chain, from conceptual design to operations and maintenance. The use of digital twins, which are digital representations of physical assets and systems to help detect, prevent, predict and optimise the physical environment through the use of AI, has also become more prevalent. In the construction sector, digital twins are being used to make investment decisions based on actionable data such as assessing the performance of buildings in real time and adjusting performance to optimise efficiency. GlobalData predicts that construction companies will spend $1bn on AI platforms by 2024. This is up from $436m in 2019, representing a compound annual growth rate (CAGR) of 19.2% between 2019 and 2024.

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Free Report
img

Internet of Things set to transform the construction industry

The Internet of Things (IoT) is proving hugely beneficial to the construction industry, allowing different assets and people to be monitored and accounted for across a traditionally fragmented industry. As a result, companies that invest in IoT now promise to make long-term gains in the industry. According to GlobalData forecasts, spending on IoT in construction will reach $9.6bn by 2025. For an industry that has large sites to manage, strict project timelines, hazardous working conditions, and tight profit margins, IoT can create a manageable view of construction sites for project managers, streamline operations, and protect workers. In addition, it allows real-time data streams of assets, automates time-consuming tasks, and ensures employee safety and productivity. IoT integration with equipment manufacturing also has rich advantages for asset monitoring sensors. This, combined with artificial intelligence (AI) can help forecast materials and workers needed during the procurement stage and assist in forecast financing. Read GlobalData’s whitepaper to find out more, including information on:
  • IoT value chain
  • Market size and growth forecasts
  • Mergers and acquisitions
  • Leading IoT adopters in construction
  • Specialist IoT vendors in construction
Don’t get left behind – find out how IoT can fortify your operations and make investments now.
by GlobalData
Enter your details here to receive your free Report.

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