In the past twelve months, the construction industry has experienced significant transformation in response to dynamic challenges and the continual emergence of new technologies. As we look ahead, the MENA region will continue to experience significant construction growth across diverse projects, including transportation, infrastructure, and residential developments, amounting to approximately $2.5trn.
To gain a better understanding of what’s at play, we spoke with a number of Procore executives to get their take on everything from evolving market dynamics and global labor scarcity to emerging trends in workforce development, contemporary payment methods, and burgeoning technological advancements – all within the construction industry.
Below is a summary of our top 5 construction predictions for the next 12 months:
The Industry Better Leverages Generative AI to Standardize Data
Today, teams are burdened to get the project done on time and within budget – while still keeping safety and quality requirements in mind. Generative AI will be leveraged by more construction businesses to help collect and standardize the vast amounts of data they operate with – providing more actionable insights and reducing risk.
“With Generative AI, companies will be able to better structure and standardize their data across the entire lifespan of a project,” said Rajitha Chaparala, vice president of Product, Data & AI. “We are already beginning to see general contractors leverage this data in unique ways to improve their business. It’s really exciting to see.”
Taking Note of Construction’s Labor Shortage Ripple Effects
While there has been some improvement over the last few years, many industries continue to struggle to recruit new talent to support the increasing demands of their customers. Moving forwards, businesses will double down on new forms of recruitment, such as positioning themselves as a technology-first company, to attract younger talent who grew up as digital natives.
With an aging workforce, construction companies will also implement new skills training and workforce development programs for their current employees, especially when it comes to leadership development and Diversity, Equity, Inclusion, Belonging (DEIB) initiatives.
“The labor shortage is not just construction’s problem; it’s everyone’s problem. It’s stopping us from being able to effectively future-proof our infrastructure for population growth and climate change, let alone repair the aging infrastructure we have today,” said Tooey Courtemanche, Procore Founder and CEO. “This means that our future energy security, home buying power, ability to commute safely to work, and more, hinge upon getting more people into construction. We should all be invested in attracting more people to construction because it will benefit us all.”
Increased Sustainability Regulation Leads to More Formalized ESG Programs
Environmental, Social, and Governance (ESG) is now top of mind for every business, especially construction which continues to have a large carbon footprint. As we head into next year, we expect there will be a move to a more universal or standardized method of carbon reporting in the built environment.
“Many construction companies now routinely report on their ESG efforts and they typically appoint a vice president or executive to oversee this important area of the business,” said Sandra Benson, vice president of Industry Strategy. “Not having an ESG program in place could potentially disqualify a company from consideration for a project. In the future, the inability to meet ESG requirements may even prevent companies from submitting bids altogether.”
Using Data-Driven Insights to Enhance Risk Management
In 2023, as much as $40 billion was wasted in the construction industry due to inefficiencies and poor productivity. Construction companies are looking for a platform that can connect their construction data, structure that data, and then glean insights to help reduce risks on future projects. Groundbreaking solutions like Procore Risk Advisors are already rewarding companies that see the value in risk management by using data-driven insights to unlock better insurance terms.
“It all comes back to predictability. The more we can use data to help construction professionals predict things like project delays, material needs, equipment, and weather conditions, the better off they’ll be,” said Sarah Hodges, chief marketing officer. “My hope is that we will ultimately help them avoid those kinds of situations altogether.”
Short-Term Challenges Associated with Data Standardization Continue
Because each project is so unique, customization is often required within the construction industry. The downside of that approach is that much of the data that exists is not standardized. While technology like generative AI is helping, we’re still a few years away from mainstream data standardization within the construction industry.
“About a third of our customers are in a good place in terms of standardizing their data and integrating it throughout their systems,” said Chaparala. “Another third of our customer base has started, and we have to encourage them to stay on that path by giving them tangible examples of ROI. And then I think the last third have yet to embark on this journey.”
