Dive Brief:

• Construction technology tools such as the Internet of Things (IoT) and BIM will continue to see steady growth in the construction industry between now and 2025, while more specialized solutions such as smart building technologies and 3D printing will see rapid growth in their smaller niches, according to a recent white paper from Ernst & Young LLP.
• The industry will see the most growth over the next five years ​in 3D printing, modular- and prefabrication- related technology, blockchain and robotics. 
• A continuation to full-scale digitization in the design and documentation process could lead to an estimated 12% to 20% increase in the industry's current annual cost savings related to these tools within the next 10 years. 

Dive Insight: 

Of all the tools outlined in the report, 3D printing has one of the lowest rates of adoption in the industry, but also stands to grow the most in the next five years, according to the report.

Now, 3D printing is most prevalent in concrete pouring for prefabrication and residential construction. Reduced costs, the report found, will lead to huge growth in the 3D printing industry, though it will sill remain a mostly niche contech solution.

The market value and compound annual growth rates forecasted for all tools are listed below:

Blockchain technology, according to the white paper, could potentially enable better transparency in construction projects, and smart contracts can even be used with autonomous software to determine scheduling and supply requirements, leaning on a digital ledger to dictate when to perform tasks like ordering materials. Blockchain will be a $3 billion dollar industry by 2025, Ernst & Young’s research found.

The IoT allows for continued, up-to-date data to be shared using wearables or data from other machinery and equipment. Some implementations include those like a recent one from Triax Technologies, which is using IoT-based wearables to ensure workers on jobsites can maintain social distances. 

Continued growth for solutions like smart buildings or digital twinning doesn’t necessarily translate to immediate results or profit for the construction industry, the report explained, unless they are part of an entire "technological revolution," which many contractors may not be prepared for.

Only 25% of real estate and construction firms have a digital strategy, according to the white paper, and even then, only 9% feel as though they are prepped for a total digital transformation.

On top of that, Ernst & Young’s paper reported that construction’s thin profit margins mean pouring funds into a new solution can seem risky, especially when the benefits aren’t readily apparent.

Eric Ottinger, co-author of the report and manager of construction and real estate advisory services for Ernst & Young, said that construction isn’t aided by it’s cyclical nature. Contractors are often either pressed to complete multiple projects at the same time, or are in between. The stress or lack of ongoing revenue entering the business can make implementing tech solutions a challenge. 

Determining a tech solution's return on investment is aided by compiling good data through image capture or organizing accurate information based on previous projects, Ottinger said. If a company has accurate cost predictions for each phase of the project, down to the dollar per square foot of a project, it can quickly evaluate how much time and money a new tech implementation adds. Having a benchmark of that cost using historical data makes it easier. 

“Most of these technologies are really in their infancy stage,” Ottinger said. “We’ve seen several firms begin implementing these, however, they are still either being developed or in beta phase. Most are not yet creating a positive ROI. However, the usefulness is definitely there, and this will prove true as the technologies continue to get built out, are economically scaled and further implementation is incorporated within the construction industry."