Digital investment in Australian construction up by one-third

A recent report by Autodesk and Deloitte reveals that a significant portion of investment in the Australian construction sector is being directed towards new technology, marking an increase by one-third since 2023.

The "State of Digital Adoption in the Construction Industry 2025" report indicates a general sense of optimism among construction firms regarding economic prospects for 2025, with 74% of businesses expressing confidence in the coming year. This marks an increase from 65% the previous year, alongside a steady economic growth projection of 1.2% for FY25, expected to rise to 1.9% in FY26.

Autodesk's Senior Manager for Construction Strategy & Partnerships, Asia Pacific, Sumit Oberoi, commented on the industry's digital maturity. "Our industry here in Australia has one of the highest digital maturity levels across the whole Asia-Pacific region," said Mr Oberoi. He noted the broad benefits that technology brings to construction companies, enhancing both their financial performance and the quality of construction outcomes.

Technology now accounts for 25% of total expenditure within the construction industry, up from 19% in 2023. According to Mr Oberoi, "The near doubling of investment in new technology in just two years is a sector-wide vote of confidence in what tools like AI, Construction Cloud Management, Building Information Modelling (BIM), Digital Twins and others can bring to construction businesses."

The report outlines several challenges that continue to affect the industry, including high costs of raw materials and labour, economic uncertainties, growing competition, and a shortage of skilled workers. Despite these challenges, investment in technology remains a priority, with businesses looking to leverage the tools for growth and revenue improvements.

David Rumbens, Partner at Deloitte Access Economics, remarked on this trend: "The last few years have delivered many substantial challenges to the construction industry in Australia. With that in mind, it's encouraging to see businesses in the sector are investing in technology for growth, mindful of the opportunities and profitability that these can bring, especially in times of economic uncertainty."

For construction companies, the adoption of technology can significantly impact financial and project performance. The report highlights that adoption of an additional technology correlates with a USD $1.14 million revenue increase and improvements in project delivery efficiency.

Safety in the workplace is also improved through the use of technology, according to the report. Businesses with high digital maturity reportedly experience a 50% reduction in safety incidents, crucial for an industry that employs over 1.3 million Australians.

Nevertheless, the skills gap poses a challenge, as the report indicates that 81% of businesses find it challenging to recruit suitably qualified workers. This figure has risen from 76% in the previous year. "These figures are an important wake up call for our industry when it comes to better defining the technical skills we need to make the most of new and emerging technologies," stated Mr Oberoi.

Efforts to address the skills gap include upskilling current employees, identified as the most effective solution by 58% of businesses surveyed. Only one out of four construction companies currently offer digital skills training multiple times a year, suggesting room for improvement in training efforts.

Overall, the report provides a detailed snapshot of digital adoption across various Asia-Pacific countries, identifying efficiencies and barriers unique to each market. In Australia, improved efficiency, new ideas, and increased revenue remain the top benefits from digital adoption, while lack of skills and the associated costs are predominant barriers.