Technology
a hand holding a small technology city with construction equipment

Is the Construction Industry Actually a Technology Hotbed?

The construction industry being slow to adopt tech and stuck in its analog ways is a misleading trope. In fact, many companies may be further ahead of the technology curve than people perceive.
By Andrew Silver
July 9, 2024
Topics
Technology

Technology has always been a driving force behind progress, and the construction industry is no exception. Over the years, technological advancements have revolutionized the way companies design, plan and build structures, leading to increased efficiency, safety and sustainability. From virtual-reality simulations to drones and 3D printing, technology has transformed every aspect of the construction process. However, the construction trades still lag behind other sectors in adoption of digital technologies. With a lack of skilled labor continuing to be an impediment to growth and profitability in the construction industry, technological developments could have significant implications for successful adopters.

Already, the industry is seeing a huge difference in valuation between traditional engineering and construction firms and construction software companies. As labor shortages continue to hinder growth in the industry, consolidation is likely, as is the probability that companies with the greatest tech capabilities will be the most highly valued. There are several areas of technology that are of the greatest interest in the current marketplace.

BIM

Building information modeling with computer-aided design software now allows architects and engineers to create detailed and accurate 3D models of buildings and infrastructure projects, integrating data about every aspect of the building, from materials and costs to energy efficiency and maintenance schedules. These models not only help in visualizing the final product; they also enable better communication and collaboration among project stakeholders.

VR/AR

Virtual and augmented-reality technologies are also playing an increasingly important role in the construction industry. VR simulations allow architects, engineers and clients to walk through virtual versions of buildings before they are even constructed, while AR enables onsite workers to visualize hidden infrastructure, such as electrical wiring or plumbing.

Drones

Drones have become more commonplace in recent years and are now being used not only to capture images as construction is underway, but to enable more efficient inventory management by providing real-time data on materials and equipment onsite.

3D Printing

In recent years, 3D printing, also known as additive manufacturing, has emerged as a disruptive technology with the potential to revolutionize construction methods. This technology has the potential to drastically reduce construction costs and timelines, as well as minimize material waste and environmental impact. Already, 3D printing is being used to construct everything from houses and bridges to office buildings and even entire communities.

Other materials technology seen on the market includes new uses for plastics and alternatives to steel, which may provide lower costs, design flexibility and carbon neutrality. For example, a recent start-up company developing a reinforcing material for steel and concrete hopes to introduce a replacement for rebar or fiberglass in a low-cost, environmentally benign manner.

Advancements in robotics and automation are also reshaping the construction industry. Robots equipped with advanced sensors and AI algorithms can perform a wide range of tasks, from bricklaying and welding to site inspection and demolition, faster and with greater precision than human workers—a tremendous advantage in a very tight labor market.

IoT

Moreover, the internet of things is connecting construction equipment, labor, tools and wearable devices to the internet, enabling real-time monitoring and data analysis. Smart sensors embedded in buildings can detect structural flaws, monitor environmental conditions, and optimize energy usage, leading to safer, more sustainable and more comfortable living and working spaces.

In conclusion, technology is revolutionizing the construction industry, driving innovation and transforming traditional practices. From design and planning to execution and maintenance, technological advancements are enabling builders to construct safer, more efficient and more sustainable structures than ever before. Adopters of these new technologies are likely to grow faster, be more profitable and achieve higher valuations when compared with the traditional ways of doing business.

by Andrew Silver
Andrew Silver is a managing director, bringing more than 30 years of Wall Street experience to Oberon Securities. Andy specializes in the industrial sector, including machinery, building products and construction, environmental, metals, general manufacturing and distribution.

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