Embracing Digital Transformation in Canadian Construction: A Path Towards Increased Productivity

In the face of mounting pressure to accelerate construction efforts, a striking 90% of Canadian construction leaders agree that the industry must adopt advanced technologies expeditiously. A recent report by KPMG in Canada highlights the pivotal role of digital tools in boosting productivity—a timely reminder that innovation is not just beneficial but essential for the sector’s future.

Addressing Persistent Productivity Issues

Tom Rothfischer, a Partner and National Industry Leader at KPMG, emphasizes that the construction sector’s investment in crucial technologies is essential for tackling persistently low productivity levels. These investments are not merely advantageous; they are vital to meet the evolving demands of the industry and combat the chronic housing supply shortage plaguing Canada. However, the current economic landscape poses challenges, threatening these crucial investments at a time when they are needed the most.

The Role of Clients in Driving Change

Interestingly, the report finds that clients—those who commission and fund construction projects—play an influential role in promoting the modernization of the industry. Approximately 78% of clients noted that procurement processes are slowly changing to encourage innovation and digital adoption. Furthermore, 43% indicated that they have a "highly influential" role in pushing construction companies toward technological adoption.

Rodrigue Gilbert, President of the Canadian Construction Association, highlights this trend, yet calls for further reform. He argues that the existing procurement systems often prioritize the lowest bid over long-term value, stifling innovation. To cultivate a modern, productive construction sector, he advocates for reforms that prioritize collaboration and fair risk-sharing.

The Labor Crunch: A Call for Urgent Tech Investment

As the workforce in construction ages, the report warns of an escalating labor crunch. Nearly 73% of construction leaders anticipate heightened difficulties in meeting demand over the next five to ten years, with retirements likely outpacing recruitment. The acute shortage of skilled labor, affecting 80% of construction companies, further complicates the situation and underscores the necessity of investing in technology.

Jordan Thomson, National Sector Leader for KPMG in Canada, reiterates the urgency of addressing this labor gap. He asserts that the construction industry must streamline its operations to achieve more with fewer resources. Moreover, the reduction of interprovincial trade barriers is imperative to improve productivity, enabling the sector to better manage the growing volume of projects on the horizon.

Investing in Cutting-Edge Technologies

The report reveals that construction companies are exploring a wide array of technologies aimed at improving productivity and expediting project completions. 81% of companies have reported that recent tech investments are already yielding positive results. Among the innovations highlighted are:

• Modular and Prefabricated Construction: This approach enables the construction of buildings in a factory setting before transport to the site, thereby reducing waste and accelerating timelines.
• Robotics and Automation: Technologies like robotic bricklaying and drones for site surveys are helping to enhance both safety and productivity.
• Building Information Modeling (BIM): This technology offers an integrated digital view of a project, enhancing collaboration among stakeholders and facilitating better planning.

Prioritizing a Demand-Driven Supply Chain

With supply chain challenges becoming more pronounced, particularly due to recent global events, prioritizing a demand-driven supply chain is now seen as critical. Over 56% of survey respondents identified this as their top investment priority. The ongoing pressures from U.S. tariffs and pandemic fallout have led many companies to seek innovations that offer real-time visibility into material requirements and project needs.

Diverse Technological Focus Areas

Several technologies are gaining traction within the industry. Aside from supply chain innovations, a significant number of companies are engaging with:

• Robotics and Drones: 40% are exploring the utilization of these technologies for enhanced efficiency.
• Artificial Intelligence (AI): More than 53% of firms are prioritizing AI-driven software to streamline operations and enhance decision-making.
• Cybersecurity: Construction firms are increasingly aware of the need for robust cybersecurity measures as digital tools become more widely adopted.

The Road Ahead: Integration and Upskilling

Despite the increased interest in technological adoption, Thomson cautions that significant hurdles remain in improving productivity levels. Making a commitment to invest in technology is merely the first step; successful implementation requires careful integration. Moreover, investment in upskilling workers is crucial for effectively leveraging these technologies.

Conclusion

The construction industry stands at a pivotal crossroads. As leaders embrace digital transformation, the potential for enhanced productivity and innovation is immense. However, collaboration across all stakeholders—clients, companies, and government—will be key to navigating the complexities ahead. Only through concerted efforts to reform procurement processes, invest in technology, and upskill the workforce can Canada hope to meet its ambitious construction goals and tackle ongoing challenges. The time for change is now.