8 June 2023
Explore the challenges and opportunities surrounding data strategies, technology adoption, and the overall optimism driving the sector forward.
Procore Technologies, Inc., a global leader in construction management software, has just released its highly anticipated annual report titled “How We Build Now: Technology Trends Shaping and Shifting Construction – Southeast Asia 2023.” This groundbreaking report presents crucial insights gathered from construction decision makers across Singapore, Malaysia, and the Philippines, shedding light on the industry’s sentiments, challenges, and growth opportunities.
Data Management Gap Hinders Construction Confidence
The report reveals that while construction professionals in Southeast Asia acknowledge the pivotal role of technology and data in their businesses, they remain hesitant about their data strategies. An overwhelming 99% of respondents unanimously agreed that improved data management can benefit their businesses, with an estimated average potential saving of 22% of total project spend through more efficient data handling. Surprisingly, only 6% of companies surveyed have laid the groundwork for a comprehensive data strategy. Moreover, despite 77% of companies planning to design and implement a data strategy in the next 12 months, more than half of them (52%) express only moderate confidence in their ability to do so.
Tom Karemacher, the head of the Asia Pacific region at Procore, emphasized, “Our research clearly shows that construction professionals in the region grasp the potential of data and analytical insights to drive better business outcomes and safeguard their enterprises. However, many struggle to develop clear data strategies.” Karemacher further urged software vendors to play a more significant role in facilitating this transformative journey by demonstrating the return on investment and justifying the indispensability of construction technology and data management. This, in turn, will foster the adoption of innovative solutions that unlock unparalleled value for the industry.
Construction Professionals Eager to Embrace Technology
Despite the challenges surrounding data utilization, construction professionals in Southeast Asia remain committed to their digital transformation journeys. Respondents cited several benefits of technology adoption, including improved cost management (42%), reduced reliance on human labor (39%), resource efficiency through fewer errors or rework (38%), enhanced build quality (38%), and increased project handling capacity (38%).
In a striking revelation, 77% of businesses surveyed expressed their intention to increase spending on construction technologies as a proportion of their annual budgets. Interestingly, younger businesses under 10 years old exhibited greater enthusiasm for embracing technology (81%), compared to more established enterprises over 10 to 20 years (71%) and those exceeding 20 years (68%).
Technologies Driving Change in the Construction Sector
The report identifies the most significant drivers of change in the construction industry for the next three years. Topping the list are construction management platforms (55%), followed by payment technologies (38%), pre-fabrication (34%), big data (33%), and next-generation Building Information Modeling (BIM) (30%).
Optimism Prevails in Southeast Asia’s Construction Industry
The surveyed construction professionals expressed overall optimism about Southeast Asia’s construction industry outlook. An impressive 88% of respondents expressed confidence in the market conditions over the next 12 months. This optimism stems from their expectations of an increase in both the number of projects (73%) and their respective value (71%) during the same period.
Respondents emphasized the growing importance of risk management in protecting their bottom lines. Nearly 40% of them revealed plans to reconsider contracting models to safeguard margins, while 37% considered adopting new payment methods, such as early payments at reduced margins. Persistent challenges, including the rising costs of raw materials and equipment (44%) and securing competitive bids and tenders at sustainable margins (32%), further highlighted the need for a dedicated focus on risk management.
Tom Karemacher concluded, “The ‘How We Build Now’ report serves as a research tool to reflect on the current issues affecting the industry. Through this report, we aim to inspire new conversations and showcase how construction leaders are bridging the gap between challenges and solutions.”
Additional Key Findings
The report also delves into other notable findings, including:
Wait-and-see approach to technology adoption: 40% of respondents prefer to wait until technologies are more established and proven before adopting them.
Time wasted on rework: On average, 1 in 5 project hours remains wasted on rework, hindering productivity and efficiency.
Workplace diversity and inclusion: The construction industry still needs to improve workplace diversity and inclusion, with women representing a minority in executive (25%), site manager (24%), and team leader (27%) roles.
Need for greater emphasis on sustainability: Only 51% of respondents believe that the construction industry needs to do more to adopt environmentally friendly and sustainable building practices.For further insights and detailed findings, the complete “How We Build Now: Technology Trends Shaping and Shifting Construction – Southeast Asia 2023” report can be downloaded here.