Construction is one of the most labor-intensive industries in the economy, but one of the least digitized. The hours, costs and paperwork that decide whether a job makes money still move from the field to the office by text messages, phone calls and spreadsheets, and much of the AI being sold to contractors today does nothing to change that. Contractors don't care about AI; they care whether their payroll was right last week.
Over the next few years, the AI that matters will not be the kind that replaces people, but the kind that solves problems that was never possible before, either because the cost was too high or because no person could realistically do the work. Labor accounts for 30 percent to 50 percent of total construction project spend, according to the Construction Industry Institute. Yet nearly four in 10 contractors still log those hours on paper time sheets.
The most expensive line item on the job is tracked with the least reliable method available. The pressure on labor is only growing. The CBIZ 2026 National Construction Industry Survey found that labor shortages and rising wages are the top concern for 32 percent of contractors.
The Associated Builders and Contractors estimates the industry is missing an estimated 349,000 workers, a deficit projected to reach 456,000 by 2027. I grew up in a family of tradespeople, and years before I started building software for the construction industry, my sister and I ran a small staffing business for contractors. That experience showed me how much of the back office’s time goes into piecing together hours that were never properly recorded in the first place.
In the years since, I have watched the same scene play out, contractor after contractor. A worker texts his hours to the office. The payroll administrator reads the texts, reenters them into a spreadsheet, checks the rate against the cost code, and sends it to payroll.
By the time the invoice goes out, the numbers have passed through three hands and two systems, and nobody is certain they are correct. The construction industry has heard a great deal about AI, and much of what it has been offered adds work instead of removing it: a chatbot to ask, a dashboard to check, another login for a superintendent who already has too many. The most valuable work AI can do in construction is not the work people already do.
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