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UK construction industry optimistic about AI

More than three-quarters (76%) of senior industry decision-makers at large UK firms have high expectations for the use of AI in construction
New research commissioned by IFS found that more than two-thirds (68%) of construction decision-makers think their industry is adopting AI at a faster rate than others.

The findings highlight the increasing optimism of the sector about the potential of AI.

31% of the survey sample indicate that executives and board members have high expectations for AI’s ability to enhance market knowledge.

AI will also boost product or service innovation and create consistent growth opportunities, according to 29% of the survey respondents.

While 76% of leaders report a high level of readiness for AI adoption in construction, concerns persist about the quality of AI resources, especially human skills.

Over a third (36%) rate their team’s AI skills as merely passable, highlighting a gap between AI aspirations and current capabilities.

Equally concerning, more than a quarter (27%) indicate that upskilling is not a priority.

The report found that 36% of firms have developed clear strategies and are seeing tangible results from their AI initiatives. This demonstrates the benefits of a well-planned approach.

Another 31% are in the process of gathering proposals for pilot projects, highlighting a proactive stance towards exploring AI applications.

The remaining 31% are still in the research phase, indicating a cautious yet determined effort to understand the potential of AI in the construction industry.

Despite concerted efforts, almost two-thirds (64%) of respondents believe it will take one to three years for AI to make a significant impact on their organisations.

42% of respondents indicated that their legacy-based technology landscape is hindering their progress in adopting and deploying AI.

Additionally, 41% expressed uncertainty about potential AI use cases within their business, underscoring the need for a clearer strategic direction.

Kenny Ingram, VP of construction and engineering at IFS, said: “While the enthusiasm for AI in the UK construction sector is clear, our research shows that there are significant challenges to overcome. The legacy technology landscape and the need for upskilling are potential obstacles.

“However, with a strategic approach and investment in the right resources, these barriers can be addressed effectively.”

 

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Latest statistics show drop in construction output

According to new data published on 12 June by the Office of National Statistics, construction output fell dramatically in April, which marked the third consecutive monthly fall since a small uplift was recorded in January.

The 1.4% contraction in activity was caused by decreases in both new work (- 1.9%), and repair and maintenance (-0.8%).

The survey returns suggested heavy rainfall and strong winds dampened activity during April.

The latest figures will be a blow to the Government, which on 11 June laid out its Manifesto plan to boost house building with stamp duty cuts and reinstatement of help to buy for first-time buyers.

At the sector level, seven out of the nine sectors saw a fall in April. The main contributors to the monthly decrease were private housing new work, and private housing repair and maintenance, which fell by 4.4% and 2.5%, respectively.

In the three months to April, the industry has seen construction output fall 2.2%, mainly due to a 2.8% fall in new work brought on by project delays.

Clive Docwra, managing director of property and construction consultancy McBains, said: “After last month’s figures showed the construction sector still mired in technical recession, today’s figures come as a further blow for the industry.

“A close to 2% fall in new work across the board highlights the continuing caution shown by investors being reluctant to commit to new projects while so many economic uncertainties remain.

“New work in private housing in particular remains in the doldrums, seeing a fall of more than 4%.

“Many in the industry are crossing their fingers for a post-election boost, but today’s figures show that whichever party forms the next government has a job on its hands to restore confidence and encourage growth.”

Scott Motley, head of programme, project and cost management at AECOM, said: “After an uptick in the broader economic climate, many will be hopeful that construction industry output will soon follow suit.

“Importantly, the upcoming General Election will provide clarity on the nation’s future direction earlier than anticipated, bringing with it the prospect of a new infrastructure strategy and greater confidence in investment decisions in the second half of the year.

“However, the continued high cost of doing business will still make for challenging landscape post-election until interest rates drop significantly.”

Fraser Johns, finance director at Beard, said: “Given the poor weather conditions seen in April, it should be hardly surprising to see a drop in monthly construction output. A sixth consecutive fall in the three-month series is more troubling, however it shows the mixed bag of the industry in the current climate.

“While there are those across the country undoubtedly experiencing challenges and significant pressures, from our perspective, the south of England remains incredibly buoyant with growing confidence and demand from both clients and from regional and national frameworks helping to fill our pipeline.”

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