Kenny Ingram, VP of C&E and Chris Knight, global industry director, C&E, IFS explore why the construction industry is yet to embrace AI adoption- and the benefits it could be missing out on
While most industries are undergoing more rapid transformation – driven by the accelerating adoption of technologies like Industrial AI, automation, and connected data – the construction and engineering industry is often characterised by a resistant approach to technological change.
But the tipping point has been reached, especially as asset-intensive sectors are opening their eyes to the potential of AI to make operations smarter, more efficient, and more effective. The sector is standing on the brink of a once-in-a-generation innovation shift.
Construction & engineering as a whole has been through a fundamental reshaping of how companies address long-standing challenges around profitability, productivity, and sustainability—how they respond to global economic pressures, redefine their value propositions, and deliver increasingly complex projects.
As a result, the shift from experimentation to enterprise-wide integration is now well underway, with 2026 guaranteed to mark a critical inflection point in AI adoption. But it’s essential for any business leader that is looking to leverage these technologies as essential components of larger digital transformation projects to understand the fundamental building blocks that must be in place before any type of scalable deployment is possible.
Getting the data foundation in place
One of the biggest trends we saw throughout this past year was the rapid adoption of modern Enterprise Resource Planning (ERP) platforms that serve as digital backbones across organisations. In fact, our Censuswide industry research study found that 63% of construction and engineering companies planned to adopt a new ERP system in the next one to two years, a foundational move meant to enable the scaling of AI across their enterprises.
In terms of how many companies are embarking on digital transformation projects, this modernisation statistic has proven to be underestimated. Nearly a year after making these predictions, we realise that the optimism around the role of AI being able to reshape workflows, project management, and intelligent decision-making, is fueling a greater desire to adopt a future-proof ERP platform as the springboard for scalable, trusted AI deployments.
AI is set to take pole position
The latest IFS research study “The Invisible Revolution”, which surveyed more than 300 senior executives from leading construction & engineering firms in May and June of this year, found that the sector is expected to become one of the most AI-first industries next year. Momentum is clearly building, with 91% of firms expecting to increase AI investment in 2026.
Since we are proud to count some of the world’s largest and most innovative companies in this space as IFS customers, we not only educate them on the possibilities of AI transformation, but we also get their insights on real-world AI applications within their unique operations.
Giving time back to a resource-strapped industry
One of the greatest benefits of AI that we discuss is its ability to analyse and collate data in a much faster way. This gives all their employees – from workers on the construction site to senior management in the back office – more accurate, predictable and reliable information.
The most practical example of how this enhanced and automated information gathering and analysis can benefit construction industry organisations is related to the enormous amount of time it takes to prepare their regular board presentations on project performance. Most companies host interdepartmental meetings monthly with all the senior leaders from each of their divisions. Typically, each team of people takes days, if not weeks, to prepare their data by gathering information across multiple software solutions.
Industrial AI gives construction and engineering organisations more trusted control of their business by removing the unreliability and inconsistency of human guesswork, making it faster and easier to gather, analyse, and report on every dimension of project performance—including profitability, timeline delays, budget overruns, cost forecasting, safety incidents, quality, and more. Ultimately, leveraging Industrial AI to enhance reporting and data sharing across the organisation reduces business risk and delivers greater control over project results.
The AI advantages are plain to see
These benefits are clearly resonating across the industry. The latest IFS research study found that the biggest applications of current AI deployments across construction & engineering firms were project delivery (62%) and business intelligence (59%). Out of these early adopters who are currently deploying AI, companies are already seeing these benefits: 89% report profitability gains, and 44% outperform the cross-sector average in operational efficiency, 42% in supply cost reduction, and 36% in lowering project expenditures.
With the growing economic uncertainty across the globe, the most impactful benefit of Industrial AI for this industry is giving companies greater control over project management. Out of all other industries, the project-centric nature of construction & engineering businesses makes them most at risk of diminishing and/or unpredictable profit margins in volatile and disruptive markets.
Perhaps this is why the latest AI research shows that construction & engineering firms anticipate AI’s greatest benefits in project delivery (41%) and increased profitability (36%).
Planning a blueprint for success in 2026
As we prepare to craft our 2026 predictions for a rapidly evolving industry, we take a moment to reflect on the trajectory of AI adoption and overall digital transformation that exceeded our expectations this year. It’s clear that in a very short period, most construction and engineering organisations will modernise legacy ERP systems in order to pave the way for Industrial AI and all the potential it offers to deliver greater project control.
The end result will surely be a smarter, more connected, and more resilient industry ready to redefine how the world designs, constructs, and builds.
