Construction is a big industry playing a key role across Asia Pacific, and yet it is facing a lot of challenges that need smart solutions.
The Asia Pacific construction industry produced an estimated USD4.36 trillion of output in 2022, representing 45% of the global construction industry. By the end of the decade, it’s forecast that Asia Pacific will account for just under half the industry.
This is a massive contribution from a resilient industry that is dealing with a lot of headwinds.
We recently spoke to 933 businesses across six markets – Japan, Singapore, Australia, India, Malaysia, and Hong Kong – and had many conversations with industry leaders.
The findings are highlighted in the second edition of our joint annual report with Deloitte, State of Digital Adoption in the Construction Industry 2024.
What we found was that the biggest issues facing construction were around the financials, including the cost of raw materials (33%), higher labour costs (30%), economic uncertainty (29%), growing competition (28%), and higher operational costs besides labour (22%).
Also high on the list of pain points was a lack of workers with suitable skills (25%), and staff turnover (15%). Construction supply chain challenges also made the list, with 16% of those surveyed saying they had issues in this area.
Critically, smart companies are responding.
The successful integration of technology into business operations is more and more being seen by leaders as a crucial enabling factor to navigate these challenges.
In comparison with the same report in 2023, we found new technologies assisting delivery of project work has risen to the third most common source of growth – up from the fourth most common.
Technology is growing higher on the agenda for construction companies, with more than three quarters of businesses believing technology will be required to stay competitive.
To successfully adopt new technologies, businesses need to start small by piloting projects, selecting a digital champion, tracking a range of success measures, building a digital ecosystem, and getting AI ready.
Put simply, construction companies need to get their ducks in a row now so they can implement AI in future years. And the first step to successfully implementing AI is data standardisation and having an operational common data environment, or CDE, for teams.
John Holland, an end-to-end infrastructure, building, rail and multi-modal transport company in Australia and New Zealand which employs over 5,700 people, shows us how this can be done.
Adam Plunkett and Mitchell Erickson, leaders in John Holland’s Technology and Digital Engineering teams, understand the importance of integrating new technologies in a strategic and secure way.
In 2021 John Holland launched it Digital Transformation Strategy to embrace technology to drive efficiencies and productivity, and improve health, safety, environment, and sustainability outcomes on its projects.
As part of this, John Holland has sought to streamline its technology stack, transitioning towards cloud-centric tools and digital project management software, and enabling integrations into its CDE.
This has supported an approach that leverages the right applications and capabilities which are proven and can be scaled over time to meet the individuals’ needs and enterprise requirements.
The company’s CDEs have enabled teams to collaborate more effectively through knowledge sharing and innovation across the project lifecycle.
This was demonstrated through a recent project, the Sydney Football Stadium, where John Holland used a digital whiteboard to coordinate stakeholders across the same platform. The whiteboard allowed supply chain subcontractors to schedule their work and deliveries on site, refining cycle times and streamlining project coordination.
Digital technologies can address the major challenges facing the construction industry: lowering costs, improving efficiency, and driving growth. With ongoing cost pressures and supply chain issues, businesses are being forced to adapt to new tools and ways of working and are discovering the benefits that technologies can bring to their operations.
Some of the key benefits of technology take-up the industry shared with us in our recent survey include reduced costs (46%), increased profitability (42%), increased quality of goods or services provided (42%), increased productivity (39%), improved customer experience (38%) and so many more. For business leaders, it’s become a no-brainer to prioritise the adoption of technology to solve the big issues facing them right now and into the future.
To find out more and check out all the findings in the full report State of Digital Adoption in the Construction Industry 2024, click here.
