By Ara Kharazian, Economist, Ramp

Construction sits at the center of America’s economic ambitions. Our capacity to build housing, factories, and infrastructure quickly and productively is a necessary requirement of making our economy more affordable and more competitive; but the manufacturing and construction sectors have been lagging. Labor productivity in manufacturing has stalled since 2011, and the construction sector contracted last year.

AI is a bright spot. Using spend data from more than 50K businesses, Ramp AI Index shows AI adoption in these sectors is high and growing (among construction firms, 32% pay for AI software. In manufacturing, 47%). These investments show early momentum, but only matter if productivity rises and costs come down. Politicians and pundits like to talk about modernizing American construction and manufacturing, but what does a futuristic American industry actually look like?

Let’s look at where firms are investing today. According to Ramp data on billions of dollars in construction spend, here are the top software categories for construction firms:

It’s pretty unremarkable. Some large enterprise players, some industry specific software, but mostly it’s just basic corporate productivity expenses. AI is big, but the key thing is that there’s probably not that much software spend happening in the construction sector anyway.

Why is construction slow to modernize? More advanced software exists, but actual usage is low. In researching this article, I spoke to a construction software executive who asked me if I’d ever seen a superintendent type on a job site. “It’s one finger at a time.” The implication being, in cases where firms have onboarded high-tech tools, a lot of construction managers aren’t actually using them.

The technologies coming next might be harder to ignore. Based on my conversations with construction managers and experts, I believe these emerging technologies will transform the construction sector within 5-10 years.

• Fleet management and IoT

Construction managers should have a clear dashboard to track all physical assets: cranes, excavators, trucks, generators that continuously report usage, maintenance needs, fuel levels, GPS location, and performance trends.

This tech is already offered by existing construction management software, but adoption on-site remains low. It’s key to modernizing the construction sector (lowers costs, better allocates machinery, reduces maintenance, speedier scheduling) and adoption will rise as software developers invest in usability and managers enforce usage.

• Robotics + self-driving cars and trucks

Consumers are seeing a revolution in personal travel as Waymo and Tesla bring self-driving cars to market. Construction firms will be a key industrial beneficiary of this technology.

In the future, autonomous trucking can support long-distance hauling during off-peak hours. They’ll remove waste from job sites, keeping workers safe from exposure. Smaller vehicles will deliver materials and tools to workers, reducing their physical burden. Maybe a robot can paint a wall while a worker supervises.

• AI models 

Many construction firms already rely on AI tools for writing, planning, and administrative workflows. The next phase involves deeper integration into core project decisions.

In the future, AI models will modernize the construction planning process by: simulating alternative designs to optimize constructability, optimizing material choices for availability and cost, preparing and submitting RFIs, and speeding up the research for environmental impact reports that often delay projects by months or years.

• Wearables

The future of construction will include systems that protect workers and enhance their abilities. Wearables can track location, detect falls, monitor heat stress, and provide instant alerts in emergencies. Smart helmets can support training and display instructions, or coordinate complex installations by bringing in the 40-year veteran to remotely guide the new guy on site.

I recognize this piece reads a little idealistic. The technologies are cool, but what will it take for firms to adopt them?

I spoke with Michael Chen, CEO of Yondu, a humanoid robotics company automating repetitive tasks across verticals. His view is robotics has a perception problem that inhibits adoption. People assume robotics timelines of three to five years because that’s what companies like Figure, 1X, and Tesla present, but those companies are solving harder hardware problems, like those requiring dexterous hands and fast natural walking, and that complexity will delay their path to market.

Simpler systems are ready now. Chen told me that for manufacturing and logistics, “the humanoid hardware capability and cost are already here.” Stripped-down robotic systems that eliminate legs and complex hands can be purchased for $25,000 to $50,000, often less than a car, and can handle thousands of hours of operation before requiring maintenance.

“What will happen is the quiet automation of many of the most repetitive manual tasks,” Chen said, “using robots that look far less flashy and cost far less than what you see on social media.”

Construction is moving forward quickly, with firms adopting new tools and modernizing the way projects are planned and managed. The next step is technology that works directly on the jobsite. A more advanced sector will build faster, safer, and with better visibility from design through completion, pairing the industry’s craft knowledge with smarter equipment, clearer data, and more connected workflows.

About the author

Ara Kharazian is an economist at Ramp. His writing and analysis of AI, business spend, and the economy has been covered in the New York Times, NBC News, ABC News, NPR’s Planet Money, Bloomberg, the Guardian, Vox, Axios, and more. Ara previously led economic research at Square and developed Square Payroll Index, which became one of the key public datasets used to track restaurant worker wages, tips, and overtime in the United States. He was previously an economic consultant at Cornerstone Research.