Last week, reader JS wrote down with the following:
I noticed that construction services were the least hit by one of the areas. I think you still need people to build these houses and buildings on site that cost so much. I wonder if we humans set more for Prefab houses and think that AI and robotics will reduce the costs for these houses and buildings. Which companies will you think will be involved? Is that a potential investment area?
This is a lot to be unpacked, so let's go into it. Because JS is closed to something that many analysts overlooked.
While many sectors have stored the workers due to progress in the AI and reduced new employees, the construction problems are faced with the opposite problem …
There are not enough workers and there doesn't seem to be enough innovation.
According to an McKinsey report from 2017, the US construction industry has a productivity gap of 1.6 trillion US dollars compared to automated sectors such as production.
And the average price of a new house has risen by 22% since 2020, which is partly grateful for shortage of workers and increasing material costs.
If there was ever an industry that begged to be disturbed by Prefab, AI and Robotics …
That's it.
But are we really just before a Baurevolution?
The new Prefab
For many, the word “Prefab” conjures up pictures of flimsy supporters or box -shaped starter houses with poor plumber and zero character.
But the new generation of Prefab is very different.
Companies such as VEV, ARO Homes and Intelligent City combine modular design with precision robots, layout tools and sustainable materials with the base of AI-based to create houses that can build up faster …
But often built better than those who rise on an average suburban property.
VEV claims that it could build houses up to four times faster than conventional methods, while they are generated near zero waste.
The company uses AI to automate most of the building order process, including mechanical and sanitary facilities. Ideally, it can complete a finished home from permission to delivery in less than 30 days.
ARO Homes is another building contractor who integrates software and data-controlled tools, from the analysis of the pre-site site to the use of a 3D digital twin that supports the draft literation.
Through the combination of man-made design talents with technical precision, ARO transforms homebuilding into a high-tech operation.
Intelligent City, which specializes in pre -made mass wood buildings, also uses AI software to design their projects and optimize for efficiency and sustainability.
And we don't talk about cheap starter houses.
ARO and intelligent city concentrate on medium to high-end houses with a real architectural flair.
Source: aro.homes
As you can see … Prefab doesn't have to mean boring.
However, the production covers only part of the equation in the building world.
There is still a lot of work that happens on site, like digging, laying bricks and pouring foundations.
Here the built robotics come into play.
The company transforms ordinary excavators and bulldozers with its plug-and-play automation kit called “Exosystem” into smart machines.
After installation, these rigs can dig, dig and grab in the cabin. And they are already used for projects in the United States by large contractors such as Mortenson and Black & VeATCH.
Robots like this can take longer hours and maintain a consistent issue, which means that a serious time is held for the preparation of the location.
In the right environment, you could shorten the time required to create a construction site, by up to 50%… or even more.
Then there is FBR (ASX: FBR) Hadrian X, a Australly developed mason robot that may be able to set up up to 1,000 stones per hour.
This is about 10 -faster than a person without needing water breaks or health insurance.
Pultegroup (NYSE: PHM), one of the largest householders in the country, even led a pilot in Texas with robot systems for Prefab modules last year.
According to internal estimates, this test reduced the total construction time by almost 30%.
So I believe that we will see how much more robots are used in new and exciting ways in construction.
Of course, robots do not replace every job on a website.
In a world in which the average construction worker is around 42 years old and thousands retire, robotics could be an important productivity driver for the industry.
All this – modular components, robot work and digital planning – could soon rely on a growing layer of artificial intelligence that behaves like the digital foreman.
There are already real surveillance platforms such as Trimble, with which project planning, cost control and risk assessment are automated.
In the meantime, drones and intelligent cameras scan job sites today and compare with the digital blueprints so that you can mark mistakes before they are locked up.
And AI analysis tools such as buildots even pursue progress on several positions that could reduce delays by up to 50%.
In other words, AI is already integrated into the construction industry …
Even if most people don't know that it happens.
Here is my attitude
To answer the reader JS: Yes, we still need people to build houses.
But both the built houses and the crews they build could look very different in the near future.
We are still in the early phases of the modernization of the construction industry, but a mixture of Prefab, AI and robotics could finally crack the real estate crisis.
And I don't believe that this will equate the “discontinuation” for the people who buy these new modern houses.
In addition, the use of AI and robotics has the potential to convert the construction into a high-tech growth history …
And I will keep an eye on this for future investment opportunities.
Greetings,
Ian King
Chief strategist, Banyan Hill Publishing
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