Construction Estimating Software Market Size, Share & Trends Analysis Report By Software License (Perpetual, Subscription), By Enterprise Size (Large, SMEs), By Deployment (Cloud, On-premise), By End-use, By Region, And Segment Forecasts, 2023 - 2030

Market Size & Trends

The global construction estimating software market size was estimated at USD 1.38 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 8.9% from 2023 to 2030. The construction sector is one of the major contributors to a country’s economic growth. The COVID-19 pandemic disrupted the global construction industry, affecting the economic growth of countries, such as China, India, Japan, UAE, and Mexico. To revive the pandemic-affected economy, governments of various countries are investing in this sector, which is creating robust opportunities for the growth of the construction estimating software industry. Governments are launching multiple infrastructure development projects, including the construction of houses, commercial buildings, and bridges. With these infrastructure and construction projects, governments are focusing on enhancing the GDP and the employment rate.

Construction estimating software companies and real estate developers are focusing on completing construction projects with minimum financial risks and proper resource allocation. Traditional estimating methods in the construction sector include the manual preparation of spreadsheets and statistics, which is time-consuming and requires a group of employees to manage these documents. Construction companies are using construction estimating software to avoid these issues and prepare cost estimates in minimum time using a minimum workforce. The software offers features, such as financial reports generation, tracking construction work schedules, estimation of job costs, estimation of engineering costs, payment tracking, and inspecting cost estimation. Moreover, with this software, construction managers can improve collaborations among various departments involved in the project.

The benefits offered by construction estimating software are contributing to the increased adoption of the software worldwide. However, the high initial costs of the software and evolving digital threats are the two key factors expected to hamper the growth of the market over the forecast period. The development process of the construction estimating software is a costly affair as the provider needs to hire expert software engineers and implement advanced software testing and assessment tools. Furthermore, if any company develops an innovative feature and integrates it into the software, it increases the overall costs of the product. The strict taxation policies in various countries for software significantly increase the cost of construction estimating software, which can adversely affect industry statistics.

With digital construction, companies can enhance the flexibility of their business operations and reduce excess costs. The increasing adoption of digital economic frameworks by various governments is expected to create a positive outlook for the market. Countries, such as India, the U.S., Germany, Japan, and Brazil, are focusing on the promotion of digital construction technologies by providing funding. For instance, in November 2021, the U.S. Government introduced the Infrastructure Investment and Jobs Act (IIJA) to provide funding for developing a digital construction management system. The program involved receiving USD 20 million yearly funding for the period of five years to boost the adoption of construction software in the construction sector.

Significant growth in population and rapid urbanization have accelerated residential projects across the world, creating robust market opportunities. Well-planned construction projects can have long-term economic benefits, such as advanced connectivity, greater asset values, and more business opportunities in neighboring regions. Construction estimating software can help governments prioritize sustainability goals and support creative building methods that have a helpful environmental and economic impact. The construction estimating software generates data and analytics to assist governments in making informed decisions about project setting priorities, allocation of resources, and project management, which result in better outcomes and cost savings.

Software License Insights

Based on license, the subscription segment accounted for the largest market share of 56.8% in 2022. The growth can be attributed to the evolving preference for subscription-based business models and the strong emphasis of businesses on retaining customers, reducing subscriber churn, and ensuring regulatory compliance. The transition from the perpetual license-based model to a subscription license-based model has been made possible because of advances in cloud computing. This adds flexibility to subscription-based licensing. As a result, several providers of construction estimating software have started partnering with cloud service providers to provide their software on a subscription license.

The perpetual license segment is expected to grow at a CAGR of 7.4% during the forecast period. A perpetual license allows indefinite use of the software for a one-time fee. However, technical support and software updates might be limited for the initial years. After the technical assistance period is over, the customer may opt for new software or continue using the existing perpetual licensed software without any updates and technical support. A perpetual license also involves a high level of customization or integration in line with the customer’s requirement, thereby giving customers more control over security and more insights into the situation. For instance, PlanSwift, a construction estimating software, is available under a perpetual license that includes technical support and software updates for the first year.

Deployment Insights

Based on deployment, the cloud segment accounted for the largest market share of 50.3% in 2022. The segment growth is attributed to the construction industry's continued evolution as the adoption of cloud computing is gaining traction. Cloud deployment ensures cost-efficiency while increasing productivity by allowing the use of data to streamline processes. Several large enterprises, such as Autodesk Inc. and Microsoft Corporation, are offering construction estimating software over the cloud. In December 2021, Autodesk, Inc. launched a new feature across the Autodesk Construction Cloud. It expanded its partner ecosystem as part of its efforts to connect workflows on a single platform.

The on-premises segment is expected to grow at a CAGR of 7.0% over the forecast period. On-premise deployment of construction estimating software solutions offers high data security for construction projects while facilitating functionalities, such as budget estimating, job costing, project design & scheduling, and project management. For instance, Sage Group’s Sage 300 Construction and Real Estate Management is an on-premise solution that can be installed on a company’s server and accessed from licensed workstations. The solution guarantees a high level of customization and flexibility. It supports estimation, accounting, payroll, job costing, project management & scheduling, among others.

End-use Insights

The architecture & builders segment held a market share of 40.2% in 2022 and is expected to dominate the market by 2030. The growth of this segment can be attributed to the advancements in Virtual Reality (VR) and Augmented Reality (AR) technologies and their continued integration into architecture, engineering, and consulting software, coupled with the notable increase in the number of construction projects globally are expected to open lucrative opportunities for architects and builders. The scenario is likely to drive the adoption of construction estimating software by architects and builders over the forecast period.

The contractors segment is expected to grow at a CAGR of 9.9% over the forecast period. This segment primarily caters to the use of the software to manage the costs associated with construction equipment and workforce, among other assets. They can also use construction estimating software to reduce the excess workforce costs by leveraging efficient task allocations. With the help of construction estimating software, contractors and subcontractors can enhance project efficiency and accountability by streamlining project communication and documentation. Sage Group plc's 100 Contractor is an integrated construction management solution used by several small-sized and mid-size contractors.

Enterprise Size Insights

The large enterprise segment held a market share of 61.2% in 2022 and is expected to dominate the market by 2030. This growth can be attributed to several large enterprises, such as DPR Construction, Granger Construction, and Eckardt Group, which have deployed construction estimating software as part of their efforts to reduce errors while ensuring cost efficiency, data privacy, and flexibility. Large construction companies also use these software tools to efficiently track costs and manage the budget of the project over the project's lifecycle. For instance, ProjectPro has been designed to deliver better business control and streamline accounting tasks for large construction firms.

The small & medium enterprise segment is expected to have a significant CAGR of 10.2% over the forecast period. The growth of this segment can be attributed to the advancement in cloud computing, the agility offered by cloud-based solutions, and the increase in profitability associated with the adoption of cloud-based solutions which are encouraging SMEs to opt for cloud-based construction estimating solutions. Construction estimating software can potentially facilitate fare control, better scheduling, team collaboration, and project budgeting for SMEs. Small and medium-sized construction companies are also adopting construction estimating solutions to efficiently manage resources and augment output efficiency.

Regional Insights

North America dominated the market in 2022, with a share of 37.1%. The growth can be attributed to the rapid encounter of large-scale projects that require complex construction estimating software to manage multiple features and variables. In North America, several government agencies and municipalities have started implementing Building Information Modeling (BIM) for certain construction projects. BIM software includes forecasting functions as a part of its toolset, boosting the use of technology for estimating. The North American Governments have invested significantly in infrastructure projects, such as highways, bridges, government structures, and utilities.

Asia Pacific is anticipated to rise as the fastest-developing regional market with a CAGR of 10.0%. The growth can be attributed to the growing demand for efficient and accurate cost estimation tools. Construction estimating software offers faster and more precise cost calculations, enabling construction companies to bid competitively and manage project budgets effectively. Furthermore, cloud computing and digital technology advancements have made construction estimating software more accessible and convenient. Therefore, key market players are introducing new capabilities in construction estimating solutions, allowing users to access and collaborate on project data from anywhere.

Key Companies & Market Share Insights

The key players in the market are investing resources in R&D activities to support growth and enhance their internal business operations. Companies can be seen engaging in mergers & acquisitions, and partnerships to further upgrade their products and gain a competitive advantage in the market. They are effectively working on new product development and enhancement of existing products to acquire new customers and capture more market shares.

In May 2023, Sage Group plc announced the acquisition of Corecon Technologies, Inc., a cloud-based preconstruction and project management solution provider. This strategic move extends the former’s engagement with its customer base beyond financial services and reinforces its role as a prominent provider of cloud-based technology for the construction industry by providing solutions for effectively managing various sizes of projects, from bid to closeout.

Construction Estimating Software Market Report Scope

Global Construction Estimating Software Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global construction estimating software market report based on software license, deployment, enterprise size, end-use, and region:

• Software License Outlook (Revenue, USD Billion, 2018 - 2030)

  • Perpetual License

  • Subscription License

  • Others

• Deployment Outlook (Revenue, USD Billion, 2018 - 2030)

  • Cloud

  • On-premise

• Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2030)

  • Small and Medium Enterprises

  • Large Enterprises

• End-use Outlook (Revenue, USD Billion, 2018 - 2030)

  • Architects & Builders

  • Construction Managers

  • Contractors

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • South Korea

    • Indonesia

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • Middle East and Africa

    • UAE

    • Saudi Arabia

    • South Africa