2024 wrapped & a look towards 2025 in construction

The state of play in 2024

In 2024 Australia economy grew by a meagre 0.8%, with twelve consecutive quarters of growth whilst interest rates remained stable but high. With a backdrop of slow but positive growth in Australia, the construction industry faced high borrowing costs and hangovers from COVID era contracts.

On a positive, many construction companies reported growth in revenue, and increases in EBIT (net profit before income tax) in 2024. This is a welcome change in the transition to post-COVID projects and contracts. “value of construction work remains high, indicating a substantial backlog of projects that need to be completed” according to the Fourth Quarter 2024 Australian Construction Market Update by Rider Levett Bucknal.

There were state and territory elections in QLD, ACT, NT, and TAS which brought with it a raft of new safety and compliance legislation. There were major reforms to the National Construction Code that came into effect in mid 2024. Construction companies have faced extra costs in adapting to and complying with new federal and state legislation.

The industry faces ongoing challenges to returning to healthy profitability, such as labor shortages, stalling productivity, and key input costs rising like copper.  “Productivity continues to be a challenge, with many companies reporting the biggest roadblocks being project delays, ineffective processes, supply chain disruptions and labour shortages”.

Adoption of tech by the industry

Technology is becoming more and more intwined with how construction workers do business. According to Deloitte Access Economics 38% of Construction Firms are currently using Building Information Modeling (BIM) across APAC in 2024, with a further 29% planning to use it in the future. This has been driven by advancements in BIM platforms which can reduce construction costs, delays, and risk. Platforms can have the ability in the pre-construction phase to detect conflicts between architectural, structural, and Mechanical/Electical/Plumbing (MEP) systems, reducing risk of rework during construction. This results in a thorough cross-functionally developed digital model of the plans that all stakeholders can sign off on.

Productivity gains through integrated tech

Having a fully working ecosystem of technology continued to rise in 2024. From using a system that combines multiple tools, to having interconnected apps that feed into each other, to using no-code app and workflows, tech was leveraged to solve inefficiencies. You no longer have to have a technical team to build out a custom app fit for your companies needs. Platforms like Kreo provide a use-friendly interface to build out a custom cost estimator for residential, commercial, and infrastructure projects. Many PMIS platforms let you automate repetitive tasks, reducing human errors and increasing productivity.

Having a safety platform that integrates into your current workflows and how your team goes about their day-to-day is another way to gain greater efficiencies in your tech landscape. A platform like SignOnSite can easily slip into workers current routines, with an easy learning curve built with them in mind.

Increase in cutting edge tech

New forms of technology are being leveraged by the construction industry. Augmented Reality (AR) is being used onsite to bring to life a 3D BIM overlaid onto the jobsite. This can be incredibly useful to compare the technical plans with the actual build onsite, side by side. The in-place nature of AR makes it easier to spot anomalies between the plans and the current status. AR has also been used to measure and quote jobs and to calculate required materials quickly and efficiently in a visual way. This is especially useful for comparing building materials in-situ.

As more advanced Artificial Intelligence (AI) and Large Language Models (LLM) get released, they’re also being introduced into software offerings. From keeping verbiage to brand guidelines, to managing machinery maintenance and other IoT enabled equipment. There are trepidation about the security of such algorithms and how they process data, so the risks of inputing sensitive information should be considered when integrating AI.

Top 8 types of software tools and their uses

1. Design Software - Software like CAD and BIM are used draw up plans, primarily by engineers and architects.
2. Common Data Environments (CDE) - hub for data that can be shared with various stakeholders and updated live
3. Project management Information Systems (PMIS) - helps visualise project planning and support Project Managers with timelines, deliverables, and budgets.
4. Enterprise Resource Planning (ERP) - used across most industries to manage operations, finances, HR, and other systems
5. Digital Twin Platforms - virtual replicas of physical assets for modelling, monitoring, and maintenance
6. Business Intelligence and Analytics (BI) - Programs like Power BI, SAS Viya, and OAC are used to build data cubes to then analyse to get insights and reports
7. Surveying & Reality Capture - Using drones and other technology alongside traditional surveying techniques to build a representation of a site
8. Engineering Analysis Software - engineering simulations to provide efficacy information to keep to regulatory codes.

Top 8 trends in software

1. Mobile first approach - designing with smartphones UE/UX front of mind
2. Hybrid cloud and on-premises servers - mixing privacy for sensitive data offline with accessibility and collaboration of cloud
3. Combining of platforms (CDE, PMIS, and Digital Twins) - gaining extra functionality with less learning curve
4. Investing in data quality & data collection - the better the input data, the more meaningful and accurate the insights
5. App integration and interconnected ecosystems - reduce double handling
6. No-code app development - democratising app development and integration
7. Adoption BIM software - reducing costs, delays, and risk from the pre-construction phase onward
8. Adoption of AI and Augmented reality - expanding horizons and using new tech in creative ways

Making the case for an upgrade in 2025

In 2024 we saw a greater adoption of technology in the construction industry, companies riding efficiencies and productivity gains, and an exploration of new and exciting applications of tech. Construction companies made strides to increase their profitability in a slow growing economy with hangover COVID-19 contracts. Looking to 2025, if you’re going upgrade your technology arsenal this year, here is some advice to keep you on track:

1. Do your research. Really vet your software vendors. Explore getting a technical vendor selection consultant in to make sure all of your requirements are able to be met in the most affordable and pragmatic way. Think from the perspective of your total software ecosystem, with information flowing between teams and systems.
2. Don’t get sold on add-ons. There’s shiny new technologies being launched into the market, but make sure you’re critically thinking how you will deploy this tech and the tradeoffs and risks involved. Make sure your using the technology to make life easier, like using LLMs to improved clarity in documentation, rather than leaving AI to critical decision making. Don’t buy the up sell just because of the hype.
3. Consider consolidation. Explore your current setup’s extra capabilities before finding a bespoke option for a singular department or business problem. There are lots of overlap between tools and vendors, so you may already have a solution you can quickly implement with a fast learning curve for end users. Test things out, and be willing to adapt and change.

Always keep your user base front of mind, and assess where your technology is a help and a hinderance for them. Vendors are always evolving and building out their platforms, so keep an open mind to options to meet your company requirements. Increasing profitability will continue to be a key issue in 2025, and technology adaptation can be an edge to increase EBIT.