A new report by Autodesk and Deloitte, titled "State of Digital Adoption in the Construction Industry 2024," reveals that the construction sector across Asia Pacific is facing similar challenges and is exploring artificial intelligence (AI) and other technologies as potential solutions.
The report highlights the shared challenges confronting the construction industry in New Zealand, Australia, and across Asia Pacific. These challenges include supply chain disruptions, rising construction costs, and labor shortages. The situation in New Zealand is further compounded by a recent economic downturn and extreme weather events.
According to Sumit Oberoi, Senior Manager, Construction Strategy & Partnerships, Asia Pacific at Autodesk, digital transformation is emerging as a key trend in New Zealand's construction sector due to the need to address these challenges and boost productivity.
The report, based on a survey of 933 construction firms across six markets, indicates that 30 percent of Australian companies are currently trialing or using AI software to address industry issues. These companies view AI as a tool to increase efficiency and mitigate the effects of labor shortages, rising material costs, and global supply chain disruptions.
The survey also reveals that 61 percent of Australian construction companies believe AI can reduce costs, particularly relevant in the current economic climate where construction companies are facing a high rate of insolvency.
Oberoi emphasizes that disruptive new technologies, combined with a challenging business environment, are forcing construction and engineering leaders to re-evaluate their tools, workforce skill requirements, and client and contractor interactions. He identifies generative AI as a particularly transformative technology with the potential to streamline project proposals by leveraging data from similar past projects.
The report further indicates that an additional 33 percent of Australian construction companies plan to adopt AI in the future, making it the most anticipated technology for integration into their operations. According to David Rumbens, Partner at Deloitte Access Economics, widespread AI adoption could position it alongside data analytics and mobile apps in terms of prevalence within the construction industry.
Oberoi acknowledges that integrating these technologies will be a significant undertaking. Despite the challenges, New Zealand's construction sector represents a substantial contributor to the economy, accounting for 6.7 percent of real GDP and employing a significant portion of the workforce. The industry has also witnessed record-breaking building consent numbers and continued workforce growth.
Oberoi recommends a phased approach for construction companies seeking to improve digital adoption. This approach includes starting with pilot projects, appointing a digital champion, monitoring success metrics, establishing a digital ecosystem, and evaluating AI readiness. He emphasizes the importance of data standardization and a common data environment for teams as essential first steps for successful AI implementation.
