Construction Software Market Size, Share & Industry Analysis, By Deployment (On-premise and Cloud), By Enterprise Type (Small & Medium Enterprises (SMEs) and Large Enterprises), By Building Type (Commercial & Industrial Building and Residential Building), By Application (Project Management and Scheduling, Safety and Reporting, Project Design & Quality Management, Field Service Management, Cost Accounting, and Others), By End-user (Builders & Contractors, Construction Managers, and Engineers & Architects), and Regional Forecast, 2024-2032

The global construction software market size was valued at USD 9.12 billion in 2023. The market is projected to grow from USD 9.87 billion in 2024 to USD 21.04 billion by 2032, exhibiting a CAGR of 9.9% during the forecast period.

Construction software, also known as construction management software, is a collection of digital tools designed to make the planning, execution, and oversight of construction projects more efficient and effective. It is an easily accessible platform that is designed to enhance business productivity, improve operational efficiency, and streamline the operations of residential builders and everyone involved. These tools cover a range of areas, including scheduling, managing resources, handling documents, facilitating collaboration, and estimating costs. The growth of the construction industry, driven by rapid urban development, infrastructure projects, and a demand for better project management tools, are fueling the expansion of this market. For instance,

• In July 2024, HammerTech, a construction safety software provider company, raised USD 70 million from Riverwood Capital to bring innovation across construction site safety by integrating AI and other digital technologies. The funding would help HammerTech expand its business globally and boost the efficiency of the workers.

The adoption of Building Information Modeling (BIM) technology is transforming the way projects are designed and worked on, improving accuracy and reducing errors. The market is witnessing a significant increase in the use of Building Information Modeling (BIM) technology. BIM is a digital model that represents a building's physical and functional aspects, allowing construction professionals to create, design, and manage structures more effectively. It also aims to minimize errors with enhanced operational performance. The growing demand for BIM technology is expected to continue, which will help drive the growth of the market over the forecast period. Moreover, the rising number of construction projects and the need to enhance construction productivity are the factors that fuel the growth of the market.

The outbreak of COVID-19 pandemic compelled governments across the globe to implement lockdowns, significantly impacting the construction industry. These restrictions had a huge impact on the development of construction activities, which significantly affected the industry's growth in the short term. The pandemic situation led to a minor setback in the market growth due to the shutdown of several construction sites. However, the pandemic also spurred the use of virtual tours for construction spaces, enabling stakeholders and investors to remotely assess projects, which in turn would support the expansion of the market over the forecast period.

IMPACT OF GENERATIVE AI

Gen AI Integrated Construction Solutions Boost Performance of Project Management Process to Make Data-Driven Decisions

Generative AI focuses on creating new content and solutions based on data inputs, which is having a significant impact on the construction industry. By integrating generative AI into construction software, construction companies can enhance their design processes, improve project management, optimize resources, and ultimately drive innovation in construction practices. The increasing integration of generative AI with construction tools helps to enhance the design capabilities of predictive construction site analysis. It also helps to boost the performance of the project management process, which significantly helps builders and contractors to make informed data-driven decisions favoring market growth.

Generative AI can automatically generate architectural designs based on predefined criteria, constraints, and regulations. It speeds up the design process and allows for rapid iteration of multiple design options. AI algorithms can optimize structural designs for efficiency and cost-effectiveness, considering factors such as material usage, load distribution, and environmental impact. Similarly, companies that embrace AI technologies will be better positioned to achieve greater efficiency, cost savings, and competitive advantages in the evolving construction landscape.

Hence, the rising integration of Gen AI with construction solutions is estimated to boost the performance of the project management process in making data-driven decisions.

Construction Software Market Trends

Growing Trend of Smart Cities to Fuel Growth of the Market

The growing trend of smart cities and the increasing digital transformation in the housing sector across the globe are set to drive the market during the forecast period. Smart cities prioritize enhancing citizen engagement for the sustainable use of resources, social connections, and stronger community ties, along with maintaining high standards and performance.

• According to research, around 70% of the human population is shifting to live in urban areas by 2050. This makes it important to bring development across metropolitan areas by offering sustainable development.

Furthermore, construction and design software is revolutionizing the way decisions are made when building energy-efficient structures and smart cities. For example, Building Information Modeling (BIM) tools such as AutoCAD and Revit are utilized to visualize and manage the entire lifecycle of a building or real estate project and conduct digital simulations for construction. As a result, there is a growing interest in renovating and developing homes in line with the latest smart city trends. Similarly, the rising need for urbanization and the increasing need for technically advanced commercial spaces boost the growth of the market over the forecast period.

Hence, by considering these factors, the innovations for the growing smart cities will fuel the market expansion during the forecast period.

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Construction Software Market Growth Factors

Rising Popularity of Cloud-based Construction Software Drives Market Growth

The increasing usage of construction software by various end-users such as builders, contractors, and engineers helps to enhance accessibility and save time. It increases the accuracy of the project management process. It helps to eliminate the need for costly servers, regular maintenance, and computer upgrades. Thus, contractors and builders are shifting the construction management process over the cloud to increase flexibility and reduce operation costs.

The shift toward cloud-hosted systems by contractors is aimed at reducing costs associated with legacy hardware and enhancing efficiency. Additionally, the ability to access real-time data from any location by using mobile devices delivers better capabilities in integration with other construction solutions used by contractors, driving the popularity of cloud-based networks. Therefore, the growing popularity of cloud-based construction management software is expected to propel the market growth over the forecast period.

RESTRAINING FACTORS

High Implementation and Maintenance Cost of the Product May Hinder Market Growth

The construction software is expensive to purchase, implement, and maintain. The complexity of these systems also restricts many small and medium organizations from using them. Moreover, the construction and infrastructure sectors have been significantly impacted by the pandemic, facing a broader array of challenges.

The uncertainty surrounding the recovery from the pandemic has led to a drop in investment in this technology. Hence, the high costs and difficulties associated with these systems are also expected to limit their adoption over the forecast period.

Construction Software Market Segmentation Analysis

By Deployment Analysis

Cloud-based Deployment Witnesses Rapid Adoption Due to its Automated Construction Operations

By deployment, the market is divided into on-premise and cloud.

The cloud-based segment is estimated to grow at the highest CAGR during the forecast period. The growing integration of cloud technology in the construction management process helps to automate the construction process with low maintenance costs. This key factor significantly boosts the demand for the adoption of cloud-based software by different end-users. Similarly, the growing usage of cloud-based software helps to eliminate the data silos and also enables collaborative communication across the construction lifecycle and design. According to research, 85% of contractors are using cloud-based construction solutions to offer start-to-end visibility of the complete construction management process. Thus, the adoption of cloud-based software is estimated to be high compared to on-premise over the forecast period.

The on-premise segment held the largest market share in 2023 and is slated to show moderate growth over the forecast period. This is due to the in-house hosted on-premise construction software helps to maintain level of security and control to meet the customers demand. Furthermore, the on-premise software is expensive to install and maintain, which further needs regular upgrades, support, and customization. It leads to an increase in the software's operating expenses over the period. Hence, the demand for on-premise software is low compared to cloud-based software.

By Enterprise Type Analysis

SMEs to be Leading Enterprises With their Rising Product Adoption to Save Operational Cost and Time

By enterprise type, the market is divided into small & medium enterprises (SMEs) and large enterprises.

The small & medium enterprises (SMEs) segment is projected to grow with the highest compound annual growth rate over the forecast period. The adoption of construction management tools helps to improve project cost efficiency and also maintain scalability and accessibility to save operational time and reduce operational costs. The market aims to experience substantial growth among SMEs due to the increasing need for customized construction platforms to streamline the entire construction process. This factor led to an increase in the demand for construction software in SMEs to deliver better customer experience during the forecast period.

Furthermore, the large enterprises dominated the market in terms of share in 2023. Large-sized real estate companies adopt construction management tools to automate the end-to-end construction process without any manual interactions. They majorly work on large-sized real estate and commercial projects. Furthermore, due to the high pricing of the software, large companies are able to adopt the software more quickly than SMEs. These are the factors that helped large enterprises to lead the market in 2023.

By Building Type Analysis

Increasing Need for Workflow Management Boost Growth of Commercial & Industrial Buildings

Based on building type, the market is divided into commercial & industrial building and residential building.

Among these, the commercial & building segment is projected to grow at the highest CAGR over the forecast period and also hold the largest market share in 2023. Projects in the commercial & industrial sector, such as retail centers, office buildings, and industrial facilities, generate demand for efficient use of resources, precise management, and enhanced communication among all involved individuals.

The commercial building construction process involves cost management, quality management, project planning, safety management, time management, and contract administration activities. Thus, to manage these activities, the builder or contractor needs to adopt construction software for seamless workflow management to make data-driven decisions. These factors aim to boost the demand for construction management software to complete the construction process of commercial and industrial buildings.

Furthermore, the residential building segment will grow at a moderate growth rate during the forecast period. The low investment cost and small–sized construction sites, compared to commercial & industrial buildings, reduce the demand for software in the residential segment. Hence, the growth of the market across the residential segment is comparatively lower than the commercial segment.

By Application Analysis

Rising Need to Manage Resource Productivity to Drive Product Demand across Project Management and Scheduling Segment

By application, the market is segregated into project management and scheduling, safety and reporting, project design & quality management, field service management, cost accounting, and others.

The project management and scheduling segment dominated the market with the highest construction software market share in 2023. This is due to the increasing usage of construction solution platforms to integrate schedules for efficient project management and to enhance resource productivity to carry out smoother construction operations. The software also helps to efficiently track the utilization of labor resources along with materials and machinery, which fuel the demand for project management and scheduling activities. This factor drove the demand for project management and application scheduling over the forecast period.

Furthermore, the project design & quality management segment is set to surge at the highest growth rate over the forecast period. This is due to the growing usage of construction management solutions. The companies are able to predict the issues earlier and aim to manage the quality management processes using a single centralized platform to meet the rising demands of customers.

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By End-user Analysis

Product Demand to Rise among Builders and Contractors to Automate End-to-End Construction Processes along with Seamless Communication

By end-user, the market is divided into builders & contractors, construction managers, and engineers & architects.

The builders & contractors segment held the largest market share in 2023. This is due to the increasing usage of construction management tools by contractors and sub-contractors to automate the end-to-end construction process to save time and enhance the communication among resources to drive the efficiency of the entire operational process. This is the key factor that drives the demand for builders and contractors to adopt construction software to deliver a better customer experience. These are the factors that increase the market growth over the forecast period.

Furthermore, the usage of construction management tools and software by construction managers is growing significantly to track, automate, and seamlessly manage budgets and business processes. This factor leads to a boost in the demand for construction management software by construction managers at the highest CAGR over the forecast period.

REGIONAL INSIGHTS

By region, the market has been studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific, and each region has been further studied across countries.

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North America has the highest market share in 2023 and is expected to grow with moderate growth rate over the forecast period. Increasing digitalization in the construction industry has played a crucial role in developing the economies of countries such as the U.S. and Canada. The growing need for comprehensive construction software such as bid management, CRM solutions, project management tools, and security estimation tools in operating the commercial and residential construction process fuel the growth of the regional market during the forecast period. Furthermore, the presence of tool providers such as Trimble Inc., Autodesk, Inc., Deltek, Inc., and Procore Technologies, Inc. in various countries across the region will propel the construction software market growth in North America over the forecast period.

Asia Pacific is estimated to grow at the highest CAGR during the forecast period. This is due to rising investment by the government and increasing spending on the development of the construction sector by integrating advanced digital technologies, which are the factors that help to drive the market growth in Asia Pacific during the forecast period. According to a research survey in 2024, there are approximately 124.74 cumulative real estate projects registered under the Real Estate Regulatory Authority (RERA) in India. This indicates that there will be substantial growth in the development of residential and commercial projects in India over the next few years. For instance,

• In July 2024, Nemetschek Group, a Germany-based software provider for (the architecture, engineering, construction, and operation) AEC /O industry, entered the Indian market to expand their business at a huge scale. The company aims to bring transformation across the Indian AEC industry as it identifies growth opportunities in the infrastructure space and real estate sector across the country.

Europe is expected to grow at a moderate growth rate over the forecast period. The growing investments by construction solution provider companies in SMEs and large enterprises present in various European countries drive the adoption of construction management tools to improve the performance of businesses.

• For instance, in November 2022, Procore Technologies, Inc., a prominent construction management software provider, launched its new business operation center in Germany to expand its global reach. Through this new launch in Europe, the company aims to support construction professionals in Germany and other European countries in enhancing their efficiency using automated processes.

The Middle East & Africa is projected to grow at the second highest CAGR due to the increasing adoption of construction solutions to address the challenges of managing complex projects, improve efficiency, and enhance collaboration among stakeholders. Furthermore, the need to speed up the construction timelines along with trained labor is the key factor that propels the product demand in the region.

South America is in a development phase due to growing investments by the government to bring digital transformation in the construction industry. This is further attributed to an increase in awareness toward the usage of construction management software in Brazil and Argentina, boosting the adoption of construction solutions over the forecast period.

KEY INDUSTRY PLAYERS

Technological Developments by Leading Companies to Aid Market Proliferation

Companies operating in the market mainly include Oracle Corporation, Intelvision, LLC, Deltek, Inc., Procore Technologies, Inc., Sage Group plc, Trimble Inc., and Autodesk, Inc. These firms are focusing on bringing innovations in construction software. To enhance their operations throughout the world, the market players are using various strategic methods, such as partnerships, product launch, investments, acquisitions, and mergers.

List of Top Construction Software Companies:

• Oracle Corporation (U.S.)


• Intelvision, LLC (Ireland)


• Deltek, Inc. (U.S.)


• Procore Technologies, Inc. (U.S.)


• Sage Group plc. (U.K.)


• Trimble Inc. (U.S.)


• Autodesk, Inc. (U.S.)


• Kahua (Georgia)


• Bentley Systems, Incorporated (U.S.)


• Buildertrend Solutions, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• July 2024: Render Networks, a geospatial network construction platform provider, entered into a partnership with Safe Software and expanded its digital transformation and data integration capabilities to support Render’s construction management platform. This partnership would help Render to streamline construction management workflows by increasing its expertise in Feature Manipulation Engine (FME) processes to deliver a better customer experience.


• June 2024: Trimble developed a novel Trimble Unity, an asset lifecycle management software suite. This software enables the owners of public infrastructure and capital projects to efficiently plan, design, maintain, and develop connected digital workflows.


• March 2024: Ontraccr Technologies, a Canada-based construction solution provider, raised USD 0.88 million in seed funding to expand their business into different industrial segments and across the U.S.


• November 2023: Sage Group plc. launched Sage Construction Management Software in Canada. The company added project management and cloud pre-construction capabilities to expand its construction cloud suite in the country to deliver a better customer experience.


• September 2023: Deltek ComputerEase, a software and solutions provider for project-based businesses, partnered with Procore to deliver construction management software to contractors and bring connectivity to managing the construction industry operations.

REPORT COVERAGE

The study on the market includes prominent areas globally to gain enhanced knowledge of the industry verticals. Moreover, the research offers insights into the most recent endeavors and industry developments and an analysis of high-tech solutions being adopted promptly worldwide. It also highlights some of the growth-stimulating factors which allows the reader to obtain a comprehensive understanding of the market.

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