The 2025 construction outlook: Digital twins, automation and interoperability

As we enter 2025, construction’s digital transformation is hitting its stride — with more demand for AI-powered data extraction, digital twins and automation, Matthew Desmond, vice president of Architecture, Engineering and Construction (AEC) software, and President of AGTEK at Hexagon.

Matthew Desmond, Vice President, Architecture, Engineering and Construction (AEC) Software, and President of AGTEK, Hexagon Matthew Desmond, Vice President, Architecture, Engineering and Construction (AEC) Software, and President of AGTEK, Hexagon (Photo: Hexagon)

Meanwhile, there’s a growing recognition in the industry that adopting technologies isn’t about flashy appearances — being technologically current is essential for staying competitive.

So, what does this mean for construction in the year ahead?

The AI hype is over

People want to see tangible artificial intelligence (AI) applications that deliver real value. The areas where AI is driving significant value are in analysing data, extracting relevant info, and then sharing those insights in an easy-to-understand format – much faster than a human could.

AI can compare CAD designs from large infrastructure projects with point cloud data taken from a drone or flying laser scanner to monitor construction progress. This helps to accurately track against project milestones, identifies deviations from the design, and ensures early detection of potential issues to keep the project on schedule and within budget.

AI will be able to analyse PDF and CAD project documents to extract essential details like materials, measurements, and cost breakdowns in seconds. This way contractors can quickly generate accurate and competitive bids.

We will no doubt see further advancements in these areas over the year with AI growing fastest where there is an instant impact and return on investment.

Identifying challenges is the new priority

The most successful construction companies in 2025 will be those that start by identifying their core business challenges and then strategically implement technology solutions tailored to address those challenges.

Even the most innovative technology won’t give companies a competitive edge unless they strategically implement it to address key issues and have dedicated leaders championing its rollout.

A lot of existing technology can solve a lot of different issues. Leaders need to take time to identify the root problem or objective — whether its productivity, profitability, or waste management — and from there find the solution that solves it. Open communication with the right partner can help you do this.

My advice to companies going into the new year is to identify the three biggest barriers that are holding back their business today and work back from there.

Digital twin adoption will rise

For many construction firms reflecting on key challenges, efficiency will be the biggest pain point.

To build more efficiently, we’ll see an increase in digital modelling. Virtual construction visualises and tests how something is built in a digital environment first, avoiding the risks of costly mistakes when building on site. In 2025, companies using digital models will find value beyond the construction phase: by integrating virtual representations, such as 3D models, with real-time data sources, such digital twins can optimise daily operations and management.

Hexagon’s Digital Twin Industry Report revealed “improved efficiency” as the number one benefit felt by companies who have invested in digital twin technology. However, the rate of adoption in the construction sector is lagging compared to other industries. Also, there is still a large gap in perception between digital twin adopters and nonadopters: Leaders with experience in digital twin technology report greater benefits in collaboration, cost savings, and sustainability than those who have not yet adopted digital twins expect to see. As more projects successfully demonstrate the benefits of digital twin technology, we can expect increased adoption among initially hesitant organizations.

As the industry integrates more advanced technologies like digital twins, support and training initiatives will also accelerate. Firms have to keep up with the times while technology providers need to simultaneously figure out the best ways to support this changing industry with the right kind of connected support.

Massive demand for data interoperability

Open system technologies will win over closed systems. Increasingly complex construction projects require multiple collaborators and different technologies. The industry depends on solutions that can feed into any ecosystem. Businesses still relying on closed technologies will suffer losses to productivity and innovation.

The effect runs both ways — as end-users demand more open platforms, technology providers will need to develop more interoperable tech.

In turn, data sharing will continue to increase as customers need new tech to integrate with their existing workflows. So, in 2025, we’ll see advancements in communication and collaboration through more access to data and more bandwidth to consume and share data. With this increased collaboration, data interoperability becomes a nonoptional trend.

Automation before autonomy

Autonomy is a big buzzword in construction. We like to talk about it because the possibilities are exciting. But no company will go straight from zero automation to full autonomy. They will go through stages.

Currently, achieving automation is crucial for companies seeking to enhance efficiency and competitiveness. By implementing machine control and reality capture technologies, businesses can lay a strong foundation for future steps towards autonomy.

The next critical phase will involve analysing machine environments to optimise operations and streamline the process of dispatching work orders to each machine. By automating current workflows, companies position themselves to seamlessly transition through the stages of autonomy.

Addressing the skills shortage

Taking an active approach to addressing the skills shortage will be a key priority for construction firms in 2025.

In 2024, the Associated General Contractors of America (AGC) released its construction workforce survey which revealed 94% of firms are struggling to fill vacant positions and 54% experienced project delays due to staff shortages.

Construction is more technologically advanced than we like to think. 91% of Gen Z indicating that a company’s technological sophistication influences their interest in employment, showcasing advanced technologies can be a compelling strategy to attract and retain talent. For example, highlighting the use of drones for site surveys and monitoring can appeal to tech-savvy candidates eager to work in a forward-thinking environment.

Accessible technologies will also be key in retaining talent. The digital fluency of today’s construction staff varies greatly, so companies need to prioritise solutions that are simple to install, simple to use and simple to maintain.

Profit and sustainability will go hand-in-hand

The top construction companies are starting to realise that profit and sustainability are not mutually exclusive. Greener construction reduces waste and inefficiencies and therefore increases profitability. Green is profitable but this connection is not yet commonly accepted. Furthermore, sustainable practices are no longer nice to have, they have become a core part of tenders as governments and customers alike are implementing sustainability requirements to meet climate goals.

Technologies that enhance productivity and waste management do require an initial investment. However, the most profitable companies right now are those adopting technologies that minimise waste of all kinds, both physical and operational. That decision might not fall under an official sustainability strategy, for example, but its purpose is inherently sustainable.

Every trend underscores the importance of having a well-defined strategic approach. As more companies tackle ever-more complex challenges with a growing number of technical solutions, construction firms will need to be increasingly savvy and keep an eye on both the immediate needs and the long term. They will need to choose the technologies that solve their key pain points, strategically align with goals of sustainability and profitability, and establish a foundation for expanding their automation and collaboration capabilities.

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