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Nine in 10 construction leaders say digital tools are needed to boost productivity to build more, faster, finds KPMG in Canada report.
PHOTO: Adobe Stock/Kadmy
In the face of growing pressure to build more, faster, nine in 10 Canadian construction leaders say the industry must move quickly to embrace new and advanced technologies, with most reporting that digital tools are already starting to boost their productivity. That’s according to the third biennial Digital Maturity Survey from KPMG in Canada, in collaboration with the Canadian Construction Association (CCA).
The research polled 265 construction companies in Canada, including general contractors, engineering firms, subcontractors, suppliers and institutional owners to provide a holistic view of the industry’s digital maturity.
“It is good to see that the sector is investing in the technologies that are desperately needed to address persistently poor productivity levels,” stated Tom Rothfischer, partner and national industry leader for building, construction and real estate at KPMG in Canada. “These investments are about to pay dividends and transform how we build in Canada. But the current economic and trade environment is squeezing bottom lines, putting at risk much-needed continued spending on tech – technology that is essential if we are to address the chronic housing supply shortage in this country and transform our economy through an ambitious era of nation-building mega-projects.”
According to the report, those who commission and fund construction projects can play a key role in influencing the industry to modernize. Nearly eight in 10 survey respondents say procurement processes are changing to encourage innovation and digital adoption, with 43 per cent indicating that their clients play a “highly influential” role in their decision to adopt technologies.
“It’s encouraging to see signs that procurement is beginning to evolve, but we’re not there yet,” said CCA president Rodrigue Gilbert. “Too often, the system prioritizes lowest price over long-term value, which prohibits investment in innovation. If we want a modern, productive construction sector, governments must reform procurement to foster collaboration, ensure fair risk-sharing, and create the confidence companies need to invest and grow.”
The findings also suggest that investment in technology will need to ramp up as there is an expectation for the industry’s labour crunch to worsen as the workforce ages and retirements increase over the next decade. Nearly three-quarters of construction leaders surveyed expect that it will become “increasingly difficult” to meet demand over the next five-to-10 years, particularly as retirements outpace recruitment.
“The pressure is intensifying on the construction industry to do far more with less,” said Jordan Thomson, national sector leader for building and construction at KPMG in Canada. “The industry is well aware of their labour conundrum, with eight in 10 companies still experiencing a shortage in skilled labour that’s affecting their ability to take on new work and complete current jobs.”
The removal of interprovincial trade barriers will also have impact on the construction sector.
“The challenges of working under 14 different sets of provincial rules and regulations is a further and unneeded drag on productivity that needs to be addressed if we expect the industry to be able to handle the growing volume of projects in the pipeline,” added Thomson.
The report finds that the industry is focused on deploying a wide range of technologies to improve productivity and expedite project completion, with 81 per cent of construction companies saying their recent investments in technology are already making a difference.
Some of these technologies include advancements in modular or prefabrication construction; robotics and automation, with the use of actual robots for site tasks as well as drones for site surveys; and Building Information Modelling (BIM), which improves planning and collaboration among stakeholders.
Investing in technologies to create a demand-driven supply chain that aligns supply with actual demand was ranked the top priority by more than half of survey respondents.
“The industry has always faced supply chain challenges, whether it’s the cost or availability of materials,” said Thomson. “But that’s recently been exacerbated by, among other things, U.S. tariffs, ongoing ripple effects from the pandemic, and other global macroeconomic events, prompting many companies to invest in supply chain innovation that uses digital tools, data analytics and automation that drive real-time visibility into projects and material requirements.”
And industry players are prioritizing new technologies in parallel, from demand-driven supply chain innovation to robotics, drones and exoskeletons. More than half are prioritizing prefabrication as well as artificial intelligence (AI) and AI-driven software.
“We’re seeing much more interest in tech adoption compared to where we were even two years ago. However, the sector still has a long way to go to move the needle on productivity,” advised Thomson. “Making a commitment to invest in technology is the first step. Delivering returns requires careful integration and only works if you also invest in up-skilling your people to use it effectively.”
The full report is available here.