More than half of construction firms increase AI use, survey finds

By Danny BallPublished On: November 10th, 2026Categories: News, Top Stories

More than half of construction businesses (57%) are using artificial intelligence (AI) more than they were a year ago, but 22% are not using the technology at all, according to the latest State of Trade Survey from the Federation of Master Builders (FMB) and the Chartered Institute of Building (CIOB).

In addition to this, findings highlight an increasing divide in the construction sector’s adoption of digital technology, with businesses using AI primarily to support administrative and project-related tasks.

Among firms already using AI, 80% said they deploy it for administration and office work, while 42% use it to prepare quotes, estimates and tenders.

A third (33%) are applying AI to site operations, health and safety and quality management, suggesting that businesses are using the technology to improve efficiency and support existing teams.

Construction skills shortages and rising material costs affect workloads

The increased use of AI comes against a challenging trading backdrop for construction SMEs.

During the first half of 2026, net balances for workloads and employment both fell, while enquiries also declined. Skills shortages affected 68% of businesses surveyed, with 47% reporting that a lack of workers had delayed jobs.

Rising material costs remain another pressure, with three-quarters (75%) of respondents reporting increases. Extreme weather also affected project delivery, with one in five businesses (20%) experiencing delays linked to conditions including heatwaves and rainfall.

FMB Chief Executive Brian Berry said: “These figures show that AI is becoming a more established part of how construction firms run their businesses, particularly for administration, tender preparation and project management.

“But technology is not a silver bullet: more firms reported falls than increases in workloads, enquiries and employment, while rising costs and shortages of skilled tradespeople continue to delay jobs and hold back growth.

The Government must ensure small firms have the practical support they need to navigate new technology and grow their businesses in the face of wider challenges.”

FMB and CIOB call for support for construction SMEs

CIOB chief executive Dr Victoria Hills said skills shortages continued to present challenges for smaller construction businesses, despite proposed government measures to strengthen vocational education and apprenticeships.

She said: “The construction sector continues to be an industry where many SMEs have to fight to survive and this has to change. The latest state of trade report confirms what we hear from our members daily, in that skills shortages continue to present major challenges.

“Government announcements on interventions like V-levels, vocational GCSEs and more apprenticeships are welcome but we urgently need more detail on what those will look like.

“This must include how the education sector will be supported to deliver them, and the construction sector, especially SMEs will be supported to play its role in providing work placements and teaching expertise.

“Emerging issues like extreme weather extending project timelines is also a big concern. Climate resilience is a matter that desperately needs to be higher up on the industry’s agenda, particularly in light of the prolonged hot weather we experienced this summer, the impact of which will be covered in the next Sate of Trade report.”