How AI Can Fix Australia’s Construction Productivity Crisis

Unlocking Construction Productivity with AI

Australia’s construction sector is facing a serious productivity challenge. Compared to 30 years ago, we now complete only half as many homes per hour worked. This sharp decline reveals deep inefficiencies that demand immediate attention.

The upcoming 2025 Productivity Commission reform presents a unique chance for the federal government to tackle these issues. By addressing regulatory and technological barriers, especially in traditional construction, meaningful improvements can be made.

Key Reform Pillars Affecting Construction

The Productivity Commission focuses on five reform areas:

• Creating a dynamic and resilient economy
• Building a skilled workforce
• Harnessing data and digital technology
• Delivering quality care
• Investing in cheaper and cleaner energy

While shortages of labour and rising material costs are widely known challenges, a less obvious but critical bottleneck is the slow and understaffed compliance and approvals system. This includes mandatory inspections and certification managed by local councils.

The Urgent Need to Streamline Compliance

Housing output per hour worked has halved over the past three decades. To reverse this trend, streamlining processes and improving efficiency must be the priority. This aligns directly with the commission’s focus on “Harnessing data and digital technology” and the opportunity to “enable AI’s productivity potential.”

Modernising compliance with AI is more than a tech upgrade—it’s essential to overcoming the inefficiencies that delay housing delivery.

Challenges in the Current System

The National Construction Code (NCC) is applied differently across various states and local councils, creating a complex patchwork of interpretations. Many councils are under-resourced, leading to lengthy delays in inspections, re-inspections, and approvals—sometimes stretching for weeks or months.

This inconsistent and slow compliance process contributes significantly to the productivity decline in construction.

How AI Can Improve Inspection and Compliance

AI-powered inspection systems can transform how compliance is managed. Inspectors equipped with AI-enabled mobile tools can capture voice notes and photos onsite. These inputs are then automatically converted into detailed reports, with findings tagged by location, defect type, severity, building systems, and cross-referenced with local NCC interpretations.

This eliminates manual paperwork and speeds up access to accurate compliance data for all stakeholders.

Building Institutional Knowledge with AI

Beyond faster report generation, AI structures inspection data into searchable databases. This helps local governments build institutional knowledge, identifying common compliance issues and effective solutions unique to each area.

Such databases streamline decision-making and reduce duplicate work across departments.

AI Solutions Already Making a Difference

Tools like Billie Onsite provide AI-driven solutions for quality and compliance professionals. Using voice commands and visual captures, these systems document and verify onsite findings, automate follow-ups, and generate reports linked to relevant building codes and standards.

They also create searchable knowledge bases for councils to continuously track inspections and resolutions.

Why Government Should Prioritise AI Integration

Integrating AI into compliance processes offers a clear path to:

• Boost housing delivery rates
• Improve regulatory consistency
• Reduce time spent on administrative tasks

These outcomes support the Productivity Commission’s goals and respond directly to the construction sector’s pressing challenges.

As consultations continue through 6 June, it’s critical that digital technology, especially AI, is prioritised in construction reforms. AI doesn’t replace human judgment; it equips under-resourced teams with tools that increase their efficiency and accuracy.

The technology is ready. The next step is adoption to build a more productive future in Australian construction.

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