Singapore construction companies are planning to expand their use of digital technologies and are investing more than 20 percent of their expenditure into these digitalization efforts, a report said Tuesday.

While local industry players are currently utilizing an average of five different technologies, respondents shared their aim of increasing this to an average of seven additional technologies – a higher number than any other country included in the study, Autodesk said in its “State of Digital Adoption in the Construction Industry 2024” report jointly conducted with Deloitte.

According to the report, the pace of digital transformation among Singapore construction companies is likely to have been accelerated by complementary government policies.

These include Singapore’s Built Environment Industry Transformation Map which prioritizes the adoption of common data standards and Building Information Modelling (BIM) technology.

This has likely contributed to BIM technologies and data analytics ranking among the top three technologies used by Singapore construction companies, used by 40 percent and 36 percent of respondents respectively.

It is noted that nearly four in ten (39 percent) are also using construction management cloud software, and prefabrication and modular construction technologies.

“With the challenges facing Singapore’s construction industry, artificial intelligence AI and technology adoption has become integral for businesses to succeed and to help reduce the costs of construction,

“Disruptive new technologies combined with a challenging business outlook means that construction and engineering leaders in Singapore and the rest of the Asia Pacific region will need to seriously rethink their tools, workforce skill needs and how they interact with clients and contractors,” said Sumit Oberoi, Senior Industry Strategist, Asia Pacific at Autodesk.

According to the report, AI also ranked among the technologies that Singapore construction companies are most keen to adopt, with nearly all (98 percent) considering the technology to be important to their business growth – the highest share of any country surveyed.

The report finds that 30 percent of construction companies in Singapore surveyed are currently trialing or using AI or machine learning (ML) software.

Findings indicate that the main benefits arising from AI adoption among Singapore industry players include improved efficiencies (61 percent), better margins (59 percent), with nearly six in ten (57 percent) citing increased competitive advantages, new ideas and insights, as well as enhanced relationships with clients.

More than half (56 percent) also mentioned the potential of AI to reduce costs, a key advantage that comes at a time when construction costs in Singapore are increasing.

Cited the data from Singapore’s Building Construction Authority (BCA), the report noted tender prices for construction projects across the country increased by more than 4 percent year-on year in 2023.

With factors such as manpower constraints and global inflation poised to create upward pressure on costs in 2024, the ability to manage costs will be especially important amid a strong pipeline of construction projects forecasted in Singapore for the year ahead.

In line with this, nearly half (45 percent) of Singapore construction companies surveyed expressed plans to use AI in future.

“Generative AI has exploded onto the agenda for senior leaders with the rapid adoption of tools like ChatCPT, Midjourney and Github Copilot,

“No industry is immune from the transformative potential of this technology,” added Oberoi.

He opined that generative AI means that a new project proposal doesn’t need to start from scratch, instead leveraging material and pricing based on projects completed by the company with similar specifications.

David Rumbens, Partner at Deloitte Access Economics, said that if all companies with plans to adopt AI do so, AI will have a similar level of prevalence in the construction industry as data analytics or mobile apps.

However, integrating technologies like these into business operations will be no small feat, according to the report.

The report identified the lack of digital skills as a key barrier to technology adoption, registered among more than a third (34 percent) of Singapore respondents.

Findings also indicate that Singapore construction companies were the most likely out of all countries surveyed to find actions aimed at reducing skill gaps ineffective.

For instance, while 79 percent of construction companies in Singapore had hired new workers, 32 percent found this to be ineffective in addressing the skills gap, a figure well above the regional average of 16 percent.

“Priority areas for construction businesses to improve digital adoption include starting small by piloting projects, selecting a digital champion, tracking a range of success measures, building a digital ecosystem, and assessing whether your business has the right processes and talent in place to support technology implementation at scale,

“For instance, the first step to successfully implementing AI is data standardization and having an operational common data environment for teams,” said Oberoi.

“From a talent perspective, construction companies in Singapore may leverage relevant government-led initiatives such as the SkillsFuture program,

“This is aimed at promoting skills mastery and lifelong learning for industries inclusive of construction, paving the way for a future-ready digital workforce,” he concluded.

The report also found 30 percent of regional construction companies are trialing or currently use AI in their operations, with a further 39 percent planning to use the technology in the future.

Over 80 percent believed they received strong business returns or a positive return on investment from implementing AI and other technologies including data analytics, mobile apps, robotics, prefab and modular construction, and construction management software.

Meanwhile, the critical role of technology in supporting business growth is increasingly being recognized.

There was an increase in companies seeing new technology as assisting with new project work (up from 38 percent to 45 percent) and technology in improving internal processes (up from 37 percent to 43 percent).

Foundational technologies are the most commonly used, with data analytics (47 percent), construction management software (43 percent) and mobile apps (40 percent) providing the backbone of construction operations.

Generative AI is expected to become as pervasive in the construction and engineering industry as these foundational technologies, with 94 percent of regional companies now having plans to integrate AI and machine learning into their businesses, said the report.

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