For too long, contractors have been focused on the headwinds their industry faces — and to be sure, there have been many. However, 2025 will be marked by an improving mood — great news for the construction industry.
But there’s even more to celebrate here. A better mood comes with the added benefit of increased investments. While contractors are bullish on the opportunities before them, they are more open to investing after tightening their wallets and holding off on purchases over the past six to 12 months.
Those investments will center on technology and solutions that bolster the productivity and safety of their people and assets. Contractors will prioritize investments aimed at enhancing productivity and decreasing costs.
Although the increase in inflation has slowed, construction costs remain higher than ever, and contractors will remain cautious despite their bullish outlook. Given that the industry is still struggling to attract talent, technology that helps contractors do more with less while ensuring jobs are safely completed on time and according to budget will be as critical as ever.
Despite the headwinds, there is reason for optimism, if not outright euphoria. The industry is on the precipice of incredible innovation, and 2025 could be the most exciting year for contractors and the construction industry.
A YEAR OF EXPERIMENTATION
While the construction industry has traditionally been slow to adopt new technologies, companies are more open than ever to experimenting. In the year ahead, contractors will continue this trend, scouting and deploying solutions that help them tackle the challenges stemming from a prolonged labor shortage and rising costs.
We can’t ignore the industry’s shrinking labor pool. Fewer people in the trade follow traditional methods each year, and many operate machines without a deeper understanding of their intricacies.
Data sharing will continue to emerge as a powerful tool for ensuring that jobs are completed according to specification and that minimal rework is required.
Perhaps most exciting, companies will continuously emphasize their research and development apparatuses to find new approaches to long-standing issues. Newcomers are spurring the industry forward, bringing new approaches and thought processes.
Instead of looking at research that didn’t work as failures or missed opportunities, they will see it as educational and helping them understand what doesn’t work, so they can focus on solutions that likely will. They will use these experiences to explore new approaches to the modern job site.
ELECTRIFICATION AND ALTERNATIVE FUELS
The drive toward electric and alternative-fuel vehicles has been a hot topic, though the construction industry has yet to fully embrace them. While electric vehicles are improving, it will be some time before the entire industry transitions to all-electric fleets.
The challenge for all-electrification remains the battery’s seven-and-a-half or eight-hour lifespan. The focus has been on machine aspects, such as lifting power, durability, and the undercarriage.
The industry will likely maintain diesel or hybrid fleets until batteries reliably work for 12 hours straight or can be charged quickly to enable another six hours of work.
Multiple industries are exploring alternative fuels, including railroads testing hydrogen locomotives. While there is interest, these new vehicles need to meet the needs of end users.
Companies will continue investing in R&D to explore electrification and alternative fuels, such as natural gas, propane, or another source. Concurrently, companies will continue to electrify components where it makes sense and power larger equipment using diesel motors.
The mindset is changing. Many contractors are examining their costs and noting that their input costs are high, and they know there are opportunities to save.
Fifteen years ago, many people didn’t think battery-powered cars would last, viewing them more as a fad. They’re still here, and the vehicle industry is looking at improving hybrid vehicles and delivering the next generation. Once electric equipment outperforms its traditionally fuel-powered equipment, people will say, “I want the machine that outperforms, and if it’s ‘better for the environment,’ that’s a win-win.”
ARTIFICIAL INTELLIGENCE
The coup de grâce may be the increased deployment of artificial intelligence (AI).
It’s no secret that AI is becoming increasingly leveraged across solutions. While many in the industry have been intrigued about its potential, it’s not enough for companies to deploy AI haphazardly and say they rely on the latest technology.
AI can help companies tackle the problems that have long plagued their business, and there are two parts to how organizations might deploy AI. One side focuses on productivity, while the second is on people.
Companies must understand how to keep assets and teams safer while making them more productive. AI-enabled solutions can instantaneously track tasks, ensuring teams focus on the right tasks at any given moment and ensuring projects are completed on time without rework.
Concurrently, AI can help prevent damage from jobsite accidents, ranging from smaller mishaps, from minor equipment collisions to full-blown catastrophes that result from jobsite safety infractions.
According to the United States National Library of Medicine, construction injuries cost billions of dollars annually. Aside from the monetary costs, they slow the work progress and have an emotional toll on teams, often leading to additional costs.
Leveraging AI allows contractors to level the playing field and close the widening gaps between increasing costs and decreasing profits. Technology has long enabled opportunities and a safer, more modern jobsite.
Experimenting with new approaches could lead to solutions that finally help the industry overcome its longstanding challenges, whether the prolonged labor shortage or increased costs. Whether it’s alternative fuels that reduce costs and result in a more sustainable jobsite or AI that leads to a safer jobsite, in 2025, the industry will be elevating its game, and that’s a prospect everyone should relish.
about the author
Troy Dahlin serves as the vice president for the heavy construction segment of Leica Geosystems, part of Hexagon, in North America. He is responsible for the growth of the business through increased sales and market share. For more about Leica Geosystems, visit www.leica-geosystems.com.