KPMG 2023 Construction Industry Digital Maturity Survey: Navigating Technology Adoption in Canada’s Construction Landscape

The construction industry in Canada faces unprecedented challenges spurred by recent global events, notably the COVID-19 pandemic, supply chain disruptions, and escalating material costs. Amid these hurdles, a shift toward digital maturity and technological adoption is more crucial than ever. KPMG’s 2023 Construction Industry Digital Maturity Survey, conducted in collaboration with the Canadian Construction Association (CCA), delves deep into how construction companies in Canada are embracing technology to address these evolving market needs.

The Imperative for Change

The past few years have been tumultuous for construction firms—pandemic realities exposed latent inefficiencies throughout the industry. According to the survey, a substantial two-thirds of construction companies report that the pandemic prompted them to invest either moderately or considerably in new technologies. This inclination toward digital adaptation is not merely a trend; it’s become a necessity for survival. Construction firms are feeling the urgency to enhance productivity, rectify workflow inefficiencies, and bolster worker safety.

Integration Challenges

Despite this momentum, the survey reveals a notable disconnect in companies’ digital landscapes. Only 13% of respondents believe their organizations have achieved full integration across their value chains, while 59% report partial integration. However, the potential for improvement is recognized; more than 80% of surveyed companies assert that adopting disruptive technologies can improve competitiveness and drive savings.

Bridging the Infrastructure Gap

Jordan Thomson, a senior manager at KPMG, points out the paradox: an ever-growing demand for infrastructure coupled with a constrained construction industry and rising costs. He emphasizes that technology can help bridge the gap, enabling firms to accomplish projects more efficiently.

Evolution and Investment Trends in Technology

KPMG’s 2023 survey highlights significant advancements compared to previous years. When the survey first launched in 2020, the level of digital maturity was notably low. Fast forward to 2023, and numerous firms are reallocating budgets toward technology investments focusing on project management, execution, and bid development.

Tom Rothfischer, KPMG’s National Industry Leader, underscores that strategically implemented digital tools can address critical Canadian construction vulnerabilities—including housing and infrastructure deficits. By saving time and costs, while improving safety and productivity, digital innovations can enhance project timelines and budgets.

Industry Outlook Amid Uncertainty

Despite the promising growth opportunities fueled by government investments, burgeoning housing demands, and ongoing maintenance needs, the sentiment within the industry remains mixed. Over two-thirds of respondents anticipate an economic downturn within the next year, a split of nearly 50-50 exists between those expecting it to be mild or severe.

Nevertheless, nearly 70% of firms are undeterred in their digital transformation pursuits. Instead of reconsidering their strategies due to potential economic slowdowns, many are accelerating their plans. Optimism remains prevalent among owners and suppliers compared to general contractors and subcontractors—highlighting the disparity in outlook across the industry landscape.

Addressing Labor Shortages through Technology

Labour shortages are another pressing issue that the construction industry is grappling with. Estimates suggest a potential shortfall of up to 62,000 jobs. The pandemic has accelerated retirements, further tightening the labor market. Consequently, 90% of companies are feeling the crunch, with 94% in Quebec facing difficulties in bidding and meeting project deadlines.

Fortunately, technology stands poised to mitigate these staffing challenges. Companies are exploring methods such as prefabrication and modularization alongside innovative tools and machinery to improve efficiency. Moreover, 89% of respondents assert that better project management tools can effectively tackle labor shortages.

The Expanding Technological Toolkit

As the 2023 survey illuminates, construction companies are planning significant investments in various technological arenas:

Big Data

The transformative potential of big data analytics is profound. With improved data accuracy, companies can manage projects within budget and timeline constraints more effectively. However, only 42% of firms have fully integrated cloud computing to connect data sources. The need for robust data management strategies remains critical.

Demand-Driven Supply Chain

The demand-driven supply chain emphasizes the importance of active supply chain management, which was glaringly highlighted during the pandemic. Investments in new technologies for better management are increasingly essential.

BIM and Digital Twins

Technologies like Building Information Modeling (BIM) and digital twins have shown promise in enhancing project delivery efficiency. Approximately one-third of survey participants are experienced users of these technologies.

Robotics and Automation

The potential for robotic automation is growing. Around 32% of companies utilize robotics significantly, aligning with a broader move towards innovative labor-saving technologies.

Blockchain and Smart Contracts

Approximately 60% of firms plan to implement smart contracts facilitated by blockchain technology to enhance transparency and reduce fraud risks.

Internet of Things (IoT)

While the survey indicates a growing interest in IoT applications—from wearables to structural health monitoring—investment levels vary significantly among firms.

Cyber Risk Management

Navigating the risks of increased digital connectivity is imperative. Alarmingly, only 38% of companies have implemented cybersecurity measures, leaving many vulnerable amidst a surge in cyber threats.

Cultivating a Culture of Change

Creating a shift toward digital maturity requires robust organizational changes. Resistance to change remains a barrier, with a mere 44% of companies emphasizing digital transformation’s importance at the executive level. Active engagement from department heads and clear communication of change processes are vital for successful technology adoption.

Looking Ahead

The insights from the KPMG survey underline an urgent truth: the next three to five years will be pivotal for the construction industry. Organizations must be proactive rather than reactive, adapting their operations to leverage technology effectively.

Key steps for progress in the coming years include:

• Developing comprehensive digital strategies.
• Clearly linking technology investments to organizational outcomes.
• Cultivating a talent pipeline.
• Partnering with industry experts for guidance.

As the construction landscape continues to evolve, KPMG’s survey emphasizes that the journey toward digital maturity is not just essential—it’s a necessity for thriving in a complex, technology-driven future.

For a deeper exploration of the findings from KPMG’s report, including insights into technological investments and strategic recommendations for the construction industry, you can download the complete survey by scanning the QR code below.

For further details, please visit KPMG’s site.