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How Generative AI Should Transform the Construction Industry

Generative AI just might be the solution an aging construction industry needs. As the sector grapples with labor shortages, an aging workforce, and slow technology adoption, GenAI is breaking down barriers, revolutionizing productivity, and driving innovation.

A Look at Today's Construction Industry

The construction industry is currently facing significant challenges that are impacting its growth and efficiency. One of the most pressing issues is the labor shortage, with the US Bureau of Labor Statistics projecting 646,100 job openings each year. Additionally, the workforce is aging, with the median age being 42 and the share of workers aged 55 and above increasing from 19.3% in 2015 to 22.3% in 2021 according to the National Association of Home Builders. This indicates that a substantial portion of the workforce is nearing retirement, exacerbating the labor shortage. Compounding the problem is the industry's struggle to attract younger workers, as those under the age of 25 make up only 10.0% of the construction workforce, compared to 13.6% in the overall US labor force.

Bar chart with Construction labor demographics

The demand for housing is another significant challenge. According to the National Multifamily Housing Council, the U.S. needs to build 4.3 million more apartments by 2035 to meet the demand for rental housing. This includes addressing a shortfall of 600,000 units resulting from underbuilding after the 2008 financial crisis. The underproduction of housing has also led to a decline of 4.7 million affordable apartments from 2015-2020, exacerbating the housing affordability crisis.

Furthermore, the slow adoption of technology in the construction industry has hindered progress. Traditional construction technologies are often complex and difficult to use, creating a divide between office and field employees and leaving a substantial gap between the industry's potential and its current state. These challenges underscore the need for innovative solutions to address labor shortages, meet housing demands, attract younger workers, and accelerate technology adoption in the construction industry.

The Role of Generative AI in Modernizing Construction

Generative AI (GenAI) presents a promising solution to the challenges faced by the construction industry. Unlike traditional construction technologies, GenAI is user-friendly and accessible, making it a practical tool for both office and field employees. Its ability to process natural language allows users to interact with AI in their everyday language, breaking down the barriers to technology adoption.

This is especially powerful for construction professionals who are often on the go and in their vehicles. By using voice-to-text features, you can start to draft important documents like status reports, bids, requests for proposals, and even contracts right from your vehicle. The best part is, all of this will be stored in the cloud, so you can pick it back up from your computer later and put the final touches on it. This is an example of how GenAI is a force multiplier - it makes one person more like 1.5 people by amplifying their capabilities and allowing them to accomplish more in less time.

How Can I Use GenAI in My Construction Business?

GenAI can serve as a force multiplier for your construction business, enhancing productivity and efficiency. Here are some practical applications:

  1. Automations: GenAI can automate repetitive tasks, such as sorting emails or drafting bids. By automating these tasks, your team can focus on more strategic activities, saving time and reducing errors.

  2. Estimating: GenAI can transform written scopes of work into detailed takeoffs, streamlining the estimating process for both new construction projects and remodels. This not only speeds up the planning process but also increases accuracy.

  3. Cost Efficiency: By automating administrative tasks, such as bill processing, GenAI can help reduce operational costs. For example, an AI tool developed by RTB-AI automated the sorting and encoding of bills for an organization, significantly reducing manual labor.

  4. Data Analysis: GenAI can act as a data analyst, helping you uncover valuable insights from datasets. This is particularly useful for investment analysis, where AI can identify trends and patterns in data such as recent home sales or construction starts.

  5. Lead Generation: Utilize big data and powerful analysis tools to hyper-target your audience and engage them with custom-tailored, highly relevant content using GenAI.

  6. Permitting: Speed up your permit applications and bring a level of professionalism by using GenAI to synthesize project details and populate permit applications.

  7. Building Code References: If you're ever unsure about building codes, use GenAI to synthesize thousands of pages of codes to find the right source. You can even use computer vision to take photos of parts of your construction and check what codes apply to that specific stage of construction.

  8. Renderings: Create extremely high-quality renderings with off-the-shelf tools to help customers or builders visualize the completed project. This aids in the design process when making decisions about layouts, colors, finishes, etc.

  9. Contracts: In the unfortunate event of contractual disputes, use GenAI to run case law reviews and review your writing before it's sent. Everything in writing may eventually be used, so it's worth having a second set of eyes on everything.

The State of Generative AI In Construction Today

AI powered home robot assistants at the 2024 International Builders Show

I recently attended the NAHB and KBIS International Builder Show with a goal to understand how AI was being talked about in the construction industry. My takeaway is that there is some discussion about AI, but not a lot. The most prominent AI showcase was by LG, which unveiled a bipedal robot that reminded attendees to change the laundry. While it was entertaining, I'm not convinced it solves a real problem, given that most of us have a smartphone in our pockets 99% of the time.

This observation highlights that the construction industry is early on the adoption curve of Generative AI (GenAI). Those who figure out how to use it to their advantage are going to have a significant edge. Even major players like ProCore and Buildertrend haven't meaningfully incorporated GenAI into their tools. This could be because users are not yet demanding it. However, once users experience the power of GenAI, they will either demand these features or seek other solutions.

Some early adopters and distributors are starting to use GenAI in the Construction space.

One of the standout examples of GenAI in action is its application by RTB-AI for a kitchen and bath remodeler. Initially, the company relied on a cumbersome database of line items to generate scopes of work. This process was not only time-consuming but also limited the company's ability to expand its services beyond kitchens and baths.

RTB-AI introduced a transformative solution by employing Generative AI to streamline the process. Instead of relying on thousands of line items, the AI system could take various inputs from a site visit and produce a high-quality scope of work. This innovation eliminated the need for a complex database and enabled the company to quickly and efficiently expand its offerings.

Construction AI Assistant from the Tackle app

Innovative companies like Tackle and Ressio are integrating AI-powered features directly into their construction software, catering to remodelers and custom home builders, respectively.

Tackle has revolutionized the way construction tech is used on the go by introducing a voice-powered AI assistant. This feature allows users to perform practically any task within their app, making it incredibly convenient for sole proprietor builders who are often on the move.

Ressio focuses on giving project managers their weekends back. Traditionally, project managers would spend their Sunday evenings compiling progress reports and planning updates for the upcoming week. With Ressio's AI-powered feature, the software uses data from weekly project updates to generate a first draft of these reports. Project managers can then make a few personal touches with just a few clicks, saving valuable time and ensuring accurate, up-to-date communication with clients.

Embracing the Future with GenAI

Generative AI is transforming the construction industry, making it more efficient, cost-effective, and accessible. By embracing this technology, construction companies can overcome current challenges and unlock new opportunities for growth. The future of construction is here, and it's powered by AI. It's time to embrace GenAI and harness its potential to transform your construction business.

If you're hesitant about incorporating AI into your construction business, start small. Identify a computer-based task that is repetitive and see if AI can streamline it for you. Embrace voice-to-text features for convenience, especially when you're on the go. Remember, GenAI is not just for techies; it has numerous practical applications in construction that can enhance your business operations.

You can hear Ilan discuss GenAI for Construction on Anewgo's Podcast here.

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