AI won’t fix construction’s productivity struggle — but bold leaders will

The construction industry has long battled stagnating productivity, hindered by inefficiencies, labor shortages, and cost overruns. Meanwhile artificial intelligence is revolutionizing industries from manufacturing to financial services which, even before AI, were already benefiting from technological innovation, leading many to ask: Can AI be the game-changer construction desperately needs?

The short answer? Yes — but not on its own.

AI isn’t a magic fix. But in the hands of bold construction leaders with a clear vision, it will be a game-changing powerful force in overcoming long-standing industry challenges.

The productivity challenge

For decades, construction has faced an uphill battle to improve productivity, while industries like manufacturing, retail, agriculture, financial services, and logistics have made massive efficiency gains thanks to automation, digitalization, and process improvements. While manufacturing has more than doubled productivity over recent decades, construction has remained stagnant.

According to a McKinsey report in 2023, “jobsites today in many ways resemble those of 1924, with manual bricklaying, paper blueprints and scaffold towers.” Little wonder then that while global productivity has surged ahead, productivity in construction has stalled at less than 1% per year over the last two decades, despite a parallel 2.8% rise in the overall global economy and a 3.6% yearly increase in manufacturing.

The reasons why construction has fallen behind are myriad. Fragmented project management, unpredictable job sites, and a heavy reliance on manual labor continue to slow progress. Additionally, regulatory complexities, compliance demands, and permitting delays further challenge progress, making it even more difficult to implement sweeping changes efficiently.

Nevertheless, there is at last a very realistic opportunity that construction can capture some of the productivity gains seen in other industries by leveraging emerging technologies. But the challenge isn’t just about adopting new technology — it’s about leaders making the right strategic choices and ensuring all technology, particularly AI, is implemented effectively. 

Opportunity versus risk

Digitization and especially AI solutions are everywhere. Navigating the AI landscape can feel like standing in a massive hardware store—every tool promises to solve a problem, but choosing the right ones is crucial. From predictive analytics and robotics to generative design and automation, the sheer volume of AI tools available can be overwhelming.

The biggest risk isn’t a lack of AI tools. It’s the following:

• Chasing productivity gains too aggressively, and overloading the organization with too many AI initiatives at once, leading to change fatigue.
• Choosing the wrong solutions that don’t align with business needs.
• Failing to integrate AI properly, resulting in minimal impact or project failures.
• Investing without clear priorities wastes resources and hurts the bottom line.

‘There is at last a very realistic opportunity that construction too can gain some of that productivity enjoyed by other industries by leveraging the new technology available.’

A well-known cautionary tale is the overuse of AI in supply chain automation, where many companies took a bold leap into AI-driven logistics, investing heavily in cutting-edge technology. But without leadership ready to navigate the transition and rally their workforce, the technology fell flat. Employees struggled to adapt, systems went underutilized, and frustration mounted—ultimately leading to zero productivity gains. 

Yet, in cases where leaders doubled down with courage—adjusting their strategy, investing in change management, and re-engaging their teams—failure turned into success. These companies proved that early adoption, heavy investment, and technology alone aren’t the magic bullet—bold, adaptive leadership is.

Another example is the premature adoption of AI-driven quality control in modular construction. Firms rushed in boldly, expecting instant transformation, only to hit a wall. Without decisive leadership to manage expectations, address workforce concerns, and refine execution, incomplete data models and employee resistance derailed progress. 

But the most successful leaders didn’t retreat—they leaned in even bolder, reworking their approach, winning over their teams, and fine-tuning AI integration until real results emerged. The lesson? The‘new system’ wasn’t the issue—the difference between failure and success was leadership willing to take risks, learn from setbacks, and charge forward with conviction.

The lesson? Success isn’t about adopting AI for the sake of it — it’s about choosing and executing the right AI strategy with precision.

AI’s role

AI offers solutions to many of construction’s biggest challenges, including: 

Predictive analytics – AI can analyze past projects to forecast delays, cost overruns, and safety risks before they happen.

Automation & robotics – Autonomous equipment and robotic bricklayers can ease the burden of skilled labor shortages.

Optimized project management – AI-driven tools streamline scheduling, procurement, and workforce deployment.

Enhanced safety – AI-powered computer vision can detect hazards and improve compliance on job sites.

Telematics & asset management – AI-powered telematics can track equipment utilization, optimize fleet operations, and prevent costly downtime.

ESG & sustainability – AI can help construction companies meet ESG goals by optimizing energy use, reducing waste, and monitoring environmental impact in real-time.

But despite these advancements, AI alone cannot transform the industry. The real key to success lies in strong leadership that drives AI adoption, selects the right solutions, and executes change management flawlessly.

‘The real key to success lies in strong leadership that drives AI adoption, selects the right solutions, and executes change management flawlessly.’

Bold leadership

The companies that successfully harness AI will be led by forward-thinking executives who:

• Build the dream – Inspire with a compelling vision that sets the direction while remaining flexible, creating a journey everyone wants to be a part of.

• Define a bold AI strategy – Leaders must identify the most impactful AI opportunities and set a clear and aggressive, focused roadmap.

• Cut through the noise – With so many AI solutions available, leadership must ensure the company selects tools that align with business needs rather than chasing trends.

• Invest in change management – AI adoption isn’t just about technology — it’s about people. Leaders must ensure workers are trained, engaged, and ready to work alongside AI. Successful implementations often include pilot programs, AI literacy training, and ongoing workforce support.

• Drive a culture of adaptation – AI is evolving fast. The most successful companies will have leaders who continuously refine their AI strategy, ensuring they stay ahead of the curve.

One of many great examples is a global construction firm that implemented AI-powered project scheduling. Initially, workers resisted the new AI-driven system, but strong leadership invested in workforce training and change management. 

Within two years, project efficiency improved by 15%, and worker satisfaction with both the technology and overall operations grew significantly. This case underscores that technology adoption fails without strong leadership and workforce alignment.

The bottom line

AI isn’t a silver bullet for the construction industry’s productivity struggles, but with strong leadership, it will be a game-changer.

Now is the time. Firms that embrace AI with intention, invest in workforce development, and execute a bold yet focused strategy won’t just navigate this transformation – they’ll lead it.

But keep it simple. Trying to do too much too fast can easily overwhelm an organization and backfire. Bold doesn’t have to mean complex, and often, the simplest path is also the smartest and most cost-effective. 

Leaders who focus on pragmatic AI adoption and structured execution will not only drive productivity but also future-proof their companies for long-term success.

Want to discover more on what AI can do for you? Our in-depth podcast series explores the impact of AI on the industry top to bottom and outlines just what the future could look like.