Construction AI: Market Value and Growth Predictions




growth of AI in construction

The construction industry, a critical engine of global economic growth, is undergoing a remarkable transformation, spearheaded by the advancements and integration of Artificial Intelligence (AI) and automation technologies. This shift is not merely incremental; it signifies a paradigm change, promising to redefine traditional construction practices by boosting efficiency, safety, and productivity.

AI in Construction

The construction sector, contributing significantly to global GDP, is in the midst of a transformative phase, propelled by digitalisation, AI, and automation. The adoption of AI in construction heralds a new era marked by data-driven decision-making and automated operations, aiming to merge technological innovation with human expertise to achieve unprecedented outcomes.

Market Value and Growth Projections

The global construction AI market, valued at $434.0 million in 2018, is on an impressive trajectory, projected to reach $4,512.3 million by 2026. This represents a Compound Annual Growth Rate (CAGR) of 33.8% from 2020 to 2027. Such robust growth underscores the sector’s recognition of AI’s potential to fundamentally change construction processes.

Factors Driving Growth

Efficiency and Cost Reduction

AI can reduce operational costs in the infrastructure industry by approximately 16%, showcasing the technology’s ability to enhance operational efficiency and lead to significant savings:

  • Material management: AI-based inventory management and procurement solutions can minimize waste and overstocking of materials, reducing material costs by up to 20%.

  • Labour costs: AI-powered tools for task assignment, scheduling, and workforce monitoring can optimize labour utilization and productivity, potentially lowering labour costs by 10-15%.

  • Equipment usage: AI and IoT-enabled equipment tracking and predictive maintenance can improve equipment uptime by over 30%, lowering repair and downtime costs.

  • Project management: AI applications for project planning, risk analysis, and change order management can minimize delays, cost overruns, and rework, reducing total project costs.

Safety Enhancements

AI’s role in improving safety is profound, with technologies capable of predicting and preventing accidents, thereby increasing safety on construction sites:

  • Real-time hazard detection: AI-powered cameras and sensors can monitor construction sites in real time, detecting hazards like falls, collisions, and unsafe behaviours. The AI can then alert workers and supervisors to take corrective action immediately.

  • Predictive analytics: By analyzing historical safety incident data, AI systems can identify patterns that indicate a higher risk of future accidents. This enables proactive measures to be taken to minimize risks before any incidents occur.

  • Automated safety checks: AI and robotics are being used to automate some routine safety checks like equipment inspections, walk-throughs, and permit verifications. This reduces human error and ensures more consistent safety compliance.

  • Accident investigation: After an accident occurs, AI can rapidly analyze data like images, sensor readings, and witness reports to identify contributing factors and recommend preventive actions to avoid similar incidents in the future.

Sustainability and Compliance

AI aids in ensuring projects adhere to green building standards, a critical consideration as the built environment accounts for 40% of the UK’s total carbon footprint. It can assist in ensuring construction projects meet sustainability standards in several ways:

  • Material selection: AI systems can analyze designs and recommend more sustainable material options based on attributes like recycled content, recyclability, and environmental impact. This helps optimize material choices to reduce a project’s carbon footprint.

  • Energy modelling: AI-powered building performance modelling tools can accurately simulate and optimize a building’s energy use to meet efficiency targets. This allows for adjustments to be made earlier in the design phase when they are most impactful.

  • Monitoring and control: Intelligent systems that monitor and control building equipment like HVAC, lighting, and elevators can automatically optimize operations in real time to minimize energy use and waste. This leads to ongoing sustainability benefits throughout the lifetime of the building.

  • Compliance tracking: AI applications can track a project’s adherence to numerous sustainability certifications, regulations, and mandates, alerting teams to any gaps or issues. This ensures all compliance requirements are met to achieve sustainability goals.

Labour Productivity

With a predicted increase in labour productivity globally by up to 40% or more by 2035, AI technologies are set to transform the workforce dynamics within the construction industry:

  • Enhanced tools and equipment: The use of AI-enabled tools like exoskeletons, robotic cranes, and 3D printers can improve the efficiency of human workers by augmenting their capabilities. Automated equipment that performs repetitive or strenuous tasks can free up workers to focus on higher-value activities.

  • Improved project planning: AI applications that optimize scheduling, resource allocation, and logistics can help construction projects stay on time and on budget. Intelligent planning tools ensure workers are assigned to the most appropriate tasks that maximize their productivity.

  • Reduced errors: AI-based quality control and inspection systems can detect defects and issues early to minimize rework. This reduces time spent fixing mistakes and allows workers to be more productive.

While AI and automation may eventually displace some roles, they also have the potential to create new, higher-skilled jobs that complement the capabilities of intelligent technologies. With change management strategies and reskilling of workers, the construction industry can harness these innovations to boost overall productivity and performance in a responsible and inclusive manner.

Growth Around the World


Australia has seen significant investments and adoption of AI and automation technologies within the construction industry. The government has announced plans to invest AU$100 million in AI and automation initiatives over the next five years to boost productivity within the sector.

The country’s construction industry is expected to see strong growth in the use of AI for applications like robotics, predictive analytics, computer vision and machine learning. This is projected to help drive efficiency gains, cost reductions, safety improvements and higher labour productivity over the next decade.

Some key AI applications gaining traction in Australia’s construction industry include:

  • Robotic process automation for administrative tasks like data entry, document processing and invoice management
  • Computer vision and AI-enabled drones for progress monitoring, quality control and safety inspections
  • Machine learning algorithms for predictive maintenance of equipment, predictive scheduling and resource optimization
  • AI-enabled tools and exoskeletons to augment workers and boost their productivity on construction sites

North America

In North America, 56% of engineering, construction, and infrastructure companies plan to implement AI within three years, reflecting a robust growth in AI adoption.

This high level of AI adoption plans indicates that North American companies see significant benefits from implementing these technologies for applications related to project planning, risk management, safety, and predictive maintenance of assets. Major drivers of AI adoption in the region’s construction sector include:

  • Improving productivity: AI tools can help boost labour productivity through the automation of manual and repetitive tasks, as well as augmenting workers with AI-powered recommendations and insights.

  • Enhancing safety: Technologies like computer vision, IoT sensors and AI analytics can help identify and mitigate potential safety risks on construction sites in real-time.

  • Reducing costs: Applications like predictive maintenance, automated scheduling and resource optimization can lower operating costs through reduced waste, downtime and rework.

  • Addressing skills gaps: AI can help make up for the shortage of skilled labour by assisting workers with complex tasks through expert recommendations, automated inspections and robotics.


European construction emphasises sustainability, with AI playing a pivotal role in driving green building practices and smart city projects.

European construction companies are placing a strong focus on sustainability and green practices, and see artificial intelligence and automation as key enablers to achieve these goals. AI technologies are being applied in various areas to:

  • Optimize the design of green buildings for maximizing energy efficiency, reducing material waste and lowering carbon footprint. AI-powered simulation tools can analyze a vast number of design options to determine the most sustainable one based on factors like daylighting, heating and cooling loads.

  • Automate construction processes using robotics, 3D printing and AI to minimize the environmental impact of building sites. This includes reducing concrete usage through AI-optimized formwork design, deploying robots for tasks like insulation installation and employing AI to schedule construction activities for the least disruption.

  • Develop smart cities through IoT sensors, computer vision and AI to manage infrastructure and resources more efficiently. This involves applications like predictive maintenance of urban assets, traffic optimization, demand-driven resource allocation and real-time anomaly detection in utility networks.

  • Enable circular economy practices by using AI to extend the useful lifespan of buildings through predictive maintenance, optimize disassembly for material recovery and facilitate the sharing economy for construction equipment and assets.


The Asia-Pacific region, with India projected to see a growth rate of 30.2% from 2021 to 2026 in AI adoption in construction, highlights the region’s rapid technological advancements.

This rapid growth is being driven by several factors:

  • Large infrastructure needs: The Asia-Pacific region has massive infrastructure requirements to support its fast-growing economies and populations. AI and automation offer the potential to improve the efficiency, speed and sustainability of infrastructure construction projects.

  • Availability of data: Countries like China, Japan and India have a large volume of construction data that can be used to train AI systems and algorithms for tasks like defect detection, planning, scheduling and monitoring.

  • Government initiatives: Many governments in the region are launching initiatives and programs to promote the adoption of emerging technologies including AI and robotics in the construction sector. This is providing a push for companies to invest in these technologies.

  • Investments from tech giants: Major technology companies from China, Japan, South Korea and India have been investing heavily in AI startups focused on construction. This is helping to commercialize more AI solutions for the market.

  • Young workforce: The Asia-Pacific region has a large young population that is more comfortable with new technologies, creating a skilled talent base for developing and deploying AI in construction.

Middle East and Africa

The Middle East, focusing on smart cities, and Africa, with its emerging AI adoption, illustrate the diverse applications of AI in addressing regional construction challenges.

Governments and construction companies in the Middle East are leveraging AI to build smart cities that improve the living experience for citizens. AI technologies are being used for traffic management, resource optimization, predictive maintenance and safety monitoring across infrastructure in smart cities. The use of AI in urban planning and design also helps make Middle Eastern cities more sustainable, connected and efficient.

In Africa, though AI adoption is still in the early stages, there are promising applications emerging to address challenges in the construction sector. AI technologies can help optimize project management, automate routine tasks, improve safety and reduce costs for African construction companies. For example, AI-powered drones and robots are being used for infrastructure inspections to identify defects and hazards. AI-enabled software is also assisting with project scheduling, resource allocation and cost estimation.

Latin America

Though in the early stages, Latin America’s gradual shift towards AI signifies a growing awareness of its potential to improve construction efficiency and safety.

Governments and organizations in Latin America are increasingly recognizing the potential of AI to address challenges in the region’s construction industry. AI technologies like machine vision, robotics and predictive analytics can help streamline processes, reduce costs and improve project outcomes for construction companies in Latin America.

Some of the areas where AI may have the greatest impact in Latin America’s construction sector include:

  • Project management: AI-powered tools can automate routine tasks like scheduling, budgeting and resource allocation to make project management more efficient. AI assistants can also flag risks and issues proactively to construction managers.

  • Safety: AI-enabled sensors, robots and drones can monitor worker safety, detect hazards and reduce accidents at construction sites. AI vision systems can also identify defects and flaws in structures under construction.

  • Equipment maintenance: Predictive maintenance tools using AI and machine learning can analyze data from equipment to detect anomalies and predict failures, improving uptime and reducing maintenance costs.

  • Labour productivity: AI assistants and automated tools can help address the shortage of skilled labour in Latin America by augmenting the capabilities of the existing workforce.


The evolving narrative of AI in construction is one of optimism, challenge, and transformation. The industry, characterised by its global footprint, faces a future where AI not only promises enhanced efficiency and safety but also demands a recalibration of skills and approaches. With a projected economic impact of $13 trillion by 2030, AI’s influence on the construction industry is undeniable, poised to redefine how buildings are designed, constructed, and maintained for years to come.

As the construction industry globally embraces AI, the variations in adoption rates and applications across regions highlight the importance of tailored approaches that consider local contexts and challenges. The journey towards a technologically advanced construction industry is underway, signalling a future where digital and physical construction landscapes coalesce, driven by the transformative power of AI.​


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