The Power of Data in Reducing Global Construction Costs

The global construction industry is faced with a very unique challenge today. 

On one hand, rising inflation (resulting in higher material, transportation and supply chain costs), a looming economic recession, reduced purchasing power in households, and lack of skilled workers threatens the growth of the industry in the current year.  

On the other hand, the severe backlog of construction projects and the focus of Governments on major public infrastructure projects promises to cushion the blow to an extent.  

What this means is that this year, the cost of construction will continue to remain high, and unlikely to return to pre-Covid levels.  

According to a recent study, construction costs have increased 28% compared to pre-pandemic levels, and this spike has been a result of global lockdowns, geopolitical issues, and recession. 

A Merit expert adds, “Today, the Government and individual organisations are taking several steps to curb costs. Organisations, for example, are delaying the launch of new construction projects until the price of materials decline and the recession washes away. The Government on the other hand, is taking initiatives like making cuts on import duty.”  

In 2023, the UK Government eased visa restrictions for construction workers, which means there will be more availability of skilled labour, which in turn will reduce labour costs. It also promotes off-site construction, wherein building components are manufactured in a factory, and assembled at the construction site. 

In addition to all these initiatives, there’s one key strategy that can potentially bring down construction costs – digital technologies and data analytics. 

In our earlier blogs, we talked about how AI and related technologies are influencing the construction industry, and we’ve also looked at its influence specifically in the residential construction space. There are a number of ways in which digital technologies can trim construction costs. 

6 Ways to Reduce Construction Costs 

Predictive maintenance 

By analysing data from equipment sensors, data analytics can be used to predict when equipment will require maintenance. This can help to reduce downtime and maintenance costs. 

Resource optimisation 

By analysing data on labour, equipment, and materials, data analytics can be used to optimise resource allocation. This can help to reduce waste and improve productivity, resulting in cost savings. 

Risk management 

By analysing data on project risks, data analytics can be used to identify and mitigate risks before they occur. This can help to reduce the likelihood of project delays and cost overruns. 

Supply chain management 

By analysing data on the supply chain, data analytics can be used to optimise the procurement process, improve inventory management, and reduce material costs. 

Performance analysis 

By analysing data on project performance, data analytics can be used to identify areas for improvement and optimise project management. This can help to reduce delays and improve productivity, resulting in cost savings. 

Best Practices to Implement Digital Technologies in Construction 

The global construction industry has traditionally been wary of newer technologies, and risk adverse owing to the industry being highly regulated, with significant investments already having been made in legacy systems, and the absence of skilled labour to operate these technologies. 

While these are valid, they are inevitable and critical points that need to be addressed if the industry is to evolve with the times. With that in mind, let’s look at best practices that the industry can adopt to effectively go digital and bring down construction costs. 

Develop a clear strategy 

Before implementing any digital technologies, it’s important to develop a clear strategy that outlines the goals, objectives, and expected outcomes. This strategy should be aligned with the business objectives and should be communicated to all stakeholders. 

Involve all stakeholders 

Digital technology implementation should involve all stakeholders, including project managers, contractors, and workers. Involving all stakeholders can help to ensure buy-in and engagement and can help to identify potential challenges and opportunities. 

Pilot projects 

It’s important to start small and pilot digital technologies on a small scale before rolling them out on a wider scale. This can help to identify potential issues and refine the technology before full implementation. 

Invest in training 

To ensure successful implementation of digital technologies, it’s important to invest in training for all stakeholders. This can include training on how to use the technology, as well as training on new processes and procedures. 

Select the right technology 

When selecting digital technologies, it’s important to choose technologies that align with the business objectives and are suitable for the specific project requirements. It’s also important to select technologies that are user-friendly and can be easily integrated with existing systems. 

Monitor and evaluate 

It’s important to monitor and evaluate the effectiveness of the digital technologies throughout the project. This can help to identify areas for improvement and ensure that the technology is delivering the expected benefits. 

There are a number of new technologies that global construction companies have already invested in and set in motion – like using drones to monitor construction sites, using robots to perform repetitive tasks like welding and bricklaying and using BIM (Building Information Modeling) to streamline design and construction process and strategies. 

Merit’s Expertise in Data Harvesting & Data Analysis in Construction 

Our state-of-the-art data harvesting engine collects high-volume, industry-specific data at 4 times the speed, with 30% more accuracy than normal scrapers, at a lower cost and with the quality control from seasoned data experts.  

Our solutions help some of the world’s largest construction intelligence brands seamlessly deliver data and insights to their end customers, including:  

• Delivering curated content from thousands of online documents or PDFs  

• Aggregating millions of specialised, industry-specific data points  

To know more, visit: https://www.meritdata-tech.com/service/code/data-harvesting-aggregation/