AI leverages vast datasets to identify patterns and make informed decisions, with the potential to drive the industry toward greater efficiency and productivity. That said, as with all efficiency-driven interventions, accurate input information is required to ensure that AI is able to correctly perform this work—and can be costly to the individual firm. With its ability to process extensive data sets and learn over time, AI can become a powerful tool for overcoming historical challenges and fostering innovation.

For example, AI can bring unprecedented precision and speed to pre-construction phases, significantly impacting cost estimation and material take-offs. In 2025, several advancements will continue to redefine this phase: AI tools will offer more advanced generative design capabilities, incorporating real-time environmental data, sustainability metrics, and adaptive algorithms. These systems will optimize layouts and material use, helping firms make data-driven decisions that align with project goals.

Drone Technology

Firmatek utilizes drones for “LiDAR and aerial data imagery on construction sites in an innovative approach that can identify better work practices, highlight safety issues and provide a new perspective to owners, contractors and investors.” This allows firms to enhance surveying processes and can provide real-time site data for planning purposes and monitoring progress.

Additionally, Building Information Modeling systems enhanced by AI could facilitate complex simulations and predictive modeling. These advancements will improve risk assessment, resource planning and overall design accuracy, reducing errors and streamlining the planning process.

Procurement Efficiencies

From a procurement standpoint, AI can also transform supply chain management. It’s no secret that construction projects rely on complex, interconnected supply chains, and any disruption can lead to costly delays. AI has the power to forecast demand for materials, provide real-time tracking, and evaluate performance data to reduce the risk of disruptions.

In applications, Prologis, a global logistics real estate leader, implemented AI-driven supply chain software to optimize warehouse operations. The system predicts order volumes and adjusts staffing and inventory needs accordingly. The result was a notable reduction in operational costs and improved delivery times for contractors sourcing materials. Across the industry, they also predict that up to 50% of logistics operations could include Autonomous Mobile Robots over the next decade.

It’s not just design and pre-construction—AI’s impact extends to the construction phase, transforming project management and risk mitigation strategies. Real-time data analysis allows AI to detect scheduling conflicts and potential risks early, enabling proactive interventions that keep projects on track. This capability also has the power to translate into more accurate cost estimates, streamlined timelines and improved operational efficiency.

Labor Productivity

In terms of labor optimization, AI-driven predictive analytics can anticipate staffing requirements, address skill shortages and optimize workforce productivity. This ensures that labor resources are allocated effectively, reducing downtime and enhancing overall performance.

Labor optimization also extends into on-site safety. In 2024, Cementation Skanska implemented AI-backed human form recognition cameras on its fleet of large diameter piling rigs and cranes. The system “utilizes a series of cameras fitted to the base of the plant that recognizes people or objects if they get too close or encroach in a red exclusion zone—automatically suspending tracking and slewing of the machine to avoid contact and sounding an audible alarm.” This next generation AI technology is keeping workers safe, adding an additional layer of protection against potential injury with moving plants.

Beyond operational enhancements, AI may also offer financial advantages for construction and architecture and engineering firms. By optimizing resource allocation and project management, AI could enable firms to achieve higher efficiency levels, resulting in cost savings across various operational areas. Predictive analytics also help to identify opportunities to reduce material waste and optimize usage, further contributing to cost reductions. It also provides a competitive edge—theoretically, firms that adopt AI technologies can offer innovative solutions, faster project delivery and superior quality outcomes. These capabilities provide a distinct market advantage, attracting more clients and projects.

Federal Tax Credit

Firms leveraging AI may also qualify for other financial incentives. The Federal Research and Development Tax Credit is available to businesses that invest in developing or improving products, processes, or software—and many states also offer their own local credits. These can reduce tax liabilities, freeing up resources for further innovation and growth. Finally, AI’s predictive capabilities can help firms identify and mitigate risks proactively, minimizing the likelihood of cost overruns and project delays. This approach enhances financial stability.

While AI technologies offer construction firms potential operational and financial benefits, including cost reductions, improved efficiency, and enhanced risk management, their integration must be approached with caution. Firms that strategically adopt AI can unlock new opportunities, but success will depend on careful planning, balancing cost versus benefits, ongoing evaluation and a balanced approach that combines innovation with human expertise. As the industry evolves, maintaining this balance will be key to long-term success in a rapidly changing landscape.

About the author: Phillip Ross, CPA, CGMA is an Accounting and Audit Partner and Chair of the Construction Industry Group at Anchin, Block & Anchin, LLP. For more construction industry thought leadership and content, log on to www.anchin.com.