Contractors are increasing their use of AI as economic pressures continue to bite, according to new research from the Federation of Master Builders (FMB) and CIOB.
The latest state of trade survey reveals that over half of construction businesses (57%) are using AI technologies more than they were a year ago. However, 22% of respondents said they were not using AI at all.
Among businesses already using AI, 80% are deploying it for administration and office tasks, while 42% use it to prepare quotes, estimates and tenders. A third (33%) use AI in site operations, health and safety and quality management. This is evidence that firms are using technology to improve efficiency and ease pressure on stretched teams, rather than replace skilled construction roles, according to the FMB and CIOB.
The state of trade survey details the tough trading backdrop. In the first half of 2026, the net balances for workloads and employment both fell, while enquiries dropped. Skills shortages affected 68% of businesses, with 47% reporting delayed jobs, while 75% said material costs had increased. One-in-five businesses (20%) also reported project delays linked to extreme weather, including heatwaves and rainfall.
Practical support needed
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.”
CIOB chief executive Dr Victoria Hills added: “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 how 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 are 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 state of trade report.”
