IoT in Construction Market to Quadruple as Hardware, Cloud and AI Drive Growth

IoT in Construction Market Set to Quadruple by 2035 as Hardware, Cloud and AI Lead

A market research report published on September 3, 2025 forecasts the global Internet of Things (IoT) in construction market to grow from USD 19.3 billion in 2025 to USD 72.1 billion by 2035, implying a compound annual growth rate of 14.1%. The same analysis identifies hardware, cloud-based deployment, and artificial intelligence as the leading segments powering early adoption and the next wave of deployment.

Key figures and near-term outlook

The report estimates an incremental opportunity of USD 52.8 billion across 2025–2035. Growth through 2030 will be driven mainly by project owners and contractors adopting IoT for asset tracking, predictive maintenance, and workforce safety. Between 2030 and 2035 the report expects accelerated uptake as large construction firms integrate AI-driven IoT ecosystems to support real-time decisions, tighter energy management, and compliance with tougher building rules.

Which components and technologies dominate

Component segmentation points to a strong early lead for on-site devices. The hardware segment is projected to make up about 56.7% of revenue in 2025, reflecting demand for sensors, RFID tags, cameras, GPS modules, wearable monitors, and ruggedized outdoor equipment. Deployment-wise, cloud-based systems are expected to capture roughly 61.2% of revenue in 2025, offering flexibility, centralized analytics, and easier integration across multiple sites. On the technology front, artificial intelligence is forecast to account for about 58.6% of revenue in 2025, as machine learning becomes essential to analyze large sensor data streams and enable predictive functions.

Practical applications and who will use it

Common applications include real-time asset tracking, site and worker safety, project management, quality and compliance monitoring, energy management, and predictive maintenance. End users span construction companies, government and public-sector projects, equipment manufacturers, and contractors working on infrastructure, high-rise and equipment-heavy operations.

Regional growth patterns

The report places Asia-Pacific as the primary growth engine, driven by large megaprojects and rapid 5G rollouts. Specific country projections include China at a projected CAGR of 19.0% for 2025–2035, and India at 17.6%, both supported by infrastructure investment and smart-city initiatives. Europe and North America are expected to expand steadily; example CAGRs include France at 14.8%, United Kingdom at 13.4%, and the United States at 12.0% for the same period.

What is driving adoption

• Labor shortages and productivity pressure — more automation and remote oversight reduce reliance on scarce labor.
• Safety and regulatory demands — wearables and environmental sensors address stricter health, safety and sustainability rules.
• Cost and downtime reduction — predictive maintenance and asset tracking keep equipment running and projects on schedule.
• Cloud and connectivity improvements — cloud platforms, 5G and edge computing make large-scale deployments feasible and interoperable.

Market structure and competitive moves

The market is evolving through partnerships among technology vendors, equipment makers, and construction firms. Key strategies include integration of IoT with digital planning tools, investment in AI analytics, emphasis on interoperability and data security, and delivery of turnkey solutions. Vendors and suppliers focus on connecting field sensors to cloud platforms and tying sensor outputs into project scheduling, budgeting and compliance workflows.

Use cases illustrating value

Practical benefits include reduced machine downtime through predictive alerts, real-time material and tool location to speed schedules, automated safety alerts from wearable devices, and environmental monitoring for compliance. Linking IoT data to centralized dashboards enables remote oversight across sites, improved transparency among stakeholders, and more efficient post-construction maintenance.

Challenges and constraints

Wider adoption will need to address integration with legacy systems, upfront cost barriers for smaller contractors, cybersecurity risks tied to increased data flows, workforce skill gaps, and the need for consistent standards and regulatory clarity.

What to watch

Monitor large-scale AI-IoT rollouts by major contractors and equipment fleets, regional 5G coverage expansion, declines in sensor hardware costs, and cloud platform integration with building information models. These trends will determine how quickly the market shifts from isolated pilots to industry-wide standard practice.

Key Features at a Glance