Most industries are undergoing rapid transformation, driven by the accelerating adoption of technologies like Industrial AI, automation, and connected data. But the construction and engineering industry is unique. As 2025 is winding down, we recognize that this sector is standing on the brink of a once-in-a-generation innovation shift.
In 2025, the sector saw a fundamental reshaping of how companies address long-standing challenges around profitability, productivity, and sustainability – how they respond to global economic pressures, redefine their value propositions, and deliver increasingly complex projects.
One of the biggest trends we saw beginning in 2024 and continuing into this year was the rapid adoption of modern ERP platforms that serve as digital backbones across organizations. In fact, our 2024 industry research study found that 63% of construction and engineering companies planned to adopt a new ERP system in the next one to two years, a foundational move meant to enable the scaling of AI across their enterprises.
In terms of how many companies are embarking on digital transformation projects, this modernization statistic has proven to be underestimated. Nearly a year after making these predictions, we realize that the optimism around the role of AI being able to reshape workflows, project management, and intelligent decision-making, is fueling a greater desire to adopt a future-proof Enterprise Resource Planning (ERP) platform as the springboard for scalable, trusted AI deployments.
In fact, the latest IFS research study “The Invisible Revolution”, which surveyed more than 300 senior executives from leading Construction and Engineering firms in May and June of this year, found that this sector is expected to become one of the most AI-first industries next year. Momentum is clearly building, with 91% of firms expecting to increase AI investment in 2026.
Since we are proud to count some of the world’s largest and most innovative companies in this space as IFS customers, we not only educate them on the possibilities of AI transformation, but we also get their insights on real-world AI applications within their unique operations.
One of the greatest benefits of AI that we discuss is its ability to analyze and collate data in a much faster way. This gives all their employees – from workers on the construction site to senior management in the back office – more accurate, predictable and reliable information.
The most practical example of how this enhanced and automated information gathering and analysis can benefit our construction industry customers is related to the enormous amount of time it takes to prepare their regular board presentations on project performance. Most companies host interdepartmental meetings monthly with all the senior leaders from each of their divisions. Typically, each team of people takes days if not weeks to prepare their data by gathering information across multiple software solutions.
Industrial AI gives construction and engineering organizations more trusted control of their business by removing the unreliability and inconsistency of human guesswork, making it faster and easier to gather, analyze, and report on every dimension of project performance, including profitability, timeline delays, budget overruns, cost forecasting, safety incidents, quality, and more. Ultimately, leveraging Industrial AI to enhance reporting and data sharing across the organization reduces business risk and delivers greater control over project results.
These benefits are clearly resonating across the industry. The latest IFS research study found that the biggest applications of current AI deployments across construction and engineering firms were project delivery (62%) and business intelligence (59%). Out of these early adopters who are currently deploying AI, companies are already seeing these benefits: 89% report profitability gains, and 44% outperform the cross-sector average in operational efficiency, 42% in supply cost reduction, and 36% in lowering project expenditures.
With the growing economic uncertainty across the globe, the most impactful benefit of Industrial AI for this industry is giving companies greater control over project management. Out of all other industries, the project-centric nature of construction and engineering businesses makes them most at risk of diminishing and/or unpredictable profit margins in volatile and disruptive markets.
Perhaps this is why the latest AI research shows that Construction and Engineering firms anticipate AI’s greatest benefits in: project delivery (41%) and increased profitability (36%).
As we prepare to craft our 2026 predictions for a rapidly evolving industry, we take a moment to reflect on the trajectory of AI adoption and overall digital transformation that exceeded our expectations this year. It’s clear that in a very short period, most construction and engineering organizations will modernize legacy ERP systems in order to pave the way for Industrial AI and all the potential it offers to deliver greater project control. The end result will surely be a smarter, more connected, and more resilient industry ready to redefine how the world designs, constructs, and builds.
SOURCE: Chris Knight (2025 December 4) Reflections on the 2025 Construction & Engineering Industry Predictions: Spotlight on Acceleration of AI Adoption.IFS Blog. https://blog.ifs.com/reflections-on-the-2025-construction-engineering-industry-predictions-spotlight-on-acceleration-of-ai-adoption/
