Construction site using IoT devices, wearables and cloud analytics to monitor assets, safety and performance.
Global, September 3, 2025
A comprehensive market study finds the global IoT in construction market set for rapid expansion, rising from about USD 19.3 billion to roughly USD 72.1 billion over the next decade, driven by a projected 14.1% CAGR. Growth is led by rugged field hardware, cloud-first deployments and AI analytics that enable asset tracking, predictive maintenance and worker safety. Asia-Pacific, especially China and India, will be the primary growth engine. Key challenges include upfront costs for smaller contractors, legacy system integration, cybersecurity and a skills gap; mitigation includes pilots, partnerships and staff training.
A comprehensive market report released on September 3, 2025, projects the IoT in construction market will grow from USD 19.3 billion in 2025 to USD 72.1 billion by 2035, reflecting a compound annual growth rate of 14.1%. The same analysis identifies an incremental opportunity of USD 52.8 billion across the decade and expects the market to surpass USD 37 billion in the 2025–2030 window as early adopters broaden deployments.
Several industry forces are pushing construction companies to connect sites, assets and people. Rising labor shortages and pressure to lift productivity are creating demand for asset tracking, predictive maintenance and wearable safety devices. Strong government and private investments in smart infrastructure and tighter safety and environmental rules are also accelerating adoption. Advances in 5G connectivity, edge computing and machine learning are enabling richer, real-time insights that make IoT solutions more practical across large and small projects.
The market is shaped by three dominant trends: a heavy emphasis on on-site devices, a preference for cloud-based platforms, and an increasing role for artificial intelligence. The breakdown for 2025 shows hardware accounting for roughly 56.7% of revenue, reflecting demand for sensors, RFID tags, GPS modules, cameras and ruggedized wearables. Cloud-based deployment is expected to capture about 61.2% of market revenue in 2025, driven by the need to store and analyze large volumes of site-generated data and to provide centralized dashboards across multiple projects. Artificial intelligence is forecast to represent about 58.6% of technology revenue in 2025 as machine learning becomes essential for anomaly detection, failure prediction and risk forecasting.
Between 2025 and 2030 the main adopters will be project owners and larger contractors seeking better asset visibility, lower downtime and improved worker safety. From 2030 to 2035 adoption is expected to accelerate as major firms deploy AI-driven IoT ecosystems at scale to optimize energy usage, speed decision-making and meet stricter building regulations.
The Asia‑Pacific region is positioned as the primary growth engine, led by large infrastructure projects and broad 5G rollouts. Country-level projected CAGRs for 2025–2035 include China at 19.0% and India at 17.6%. Europe and North America will continue steady expansion: France is forecast at 14.8%, the United Kingdom at 13.4%, and the United States at 12.0%. Historical growth rates suggest these forward figures reflect both wider deployment beyond flagship projects and improved interoperability and network coverage.
The market divides along multiple axes: components (hardware, software, services), deployment modes (cloud, on‑premises, hybrid), technologies (AI, big data, cloud computing, AR/VR), applications and end-users. Typical on-site use cases include real‑time asset tracking, site and worker safety monitoring, predictive maintenance, project management integration, quality control and energy management for smart buildings. Environmental sensors and wearables are increasingly used to meet sustainability and safety mandates.
Technology vendors, equipment makers and construction firms are competing and collaborating to offer integrated solutions. Common commercial strategies include partnerships with contractors for tailored deployments, cloud analytics that tie sensor data to BIM and project management systems, and investments in AI models for predictive capabilities. Emphasis on data security, interoperability and the ability to scale from single sites to global portfolios is shaping product roadmaps.
Key opportunities include reduced downtime through predictive maintenance, lower operational waste, remote oversight that cuts travel and inspection costs, and improved compliance documentation via recorded sensor data. Challenges remain, especially for smaller contractors: initial costs, integration with legacy systems, cybersecurity risks, workforce skill gaps and regulatory complexity. Recommended approaches include phased pilots, partnerships with solution providers, focused cybersecurity measures and employee training.
As cloud connectivity, edge intelligence and machine learning mature, the construction sector is likely to see broader adoption of scalable, data-rich solutions for planning, monitoring and long-term asset upkeep. The combination of hardware durability, cloud agility and AI analytics will be central to raising safety, productivity and cost control across a growing number of project types worldwide.
The market is projected to reach USD 72.1 billion by 2035, up from USD 19.3 billion in 2025, with a global CAGR of about 14.1%.
Hardware is expected to hold the majority share in 2025 (about 56.7%), driven by sensors, tracking tags, cameras and wearable safety devices.
Cloud-based deployments are forecast to command the largest share (around 61.2% in 2025) because they offer scalability, remote analytics and easier integration across multiple sites.
AI is central to extracting value from IoT data, with a projected technology revenue share of about 58.6% in 2025, supporting predictive maintenance, safety monitoring and schedule optimization.
Asia‑Pacific is expected to lead growth, with country CAGRs such as China at 19.0% and India at 17.6% for 2025–2035. Europe and North America will continue steady expansion.
| Feature | 2025 Snapshot | Role / Impact |
|---|---|---|
| Market value | USD 19.3 billion | Baseline for 2025–2035 growth projection |
| Projected 2035 value | USD 72.1 billion | Conversion to large-scale, AI-driven deployments |
| Global CAGR (2025–2035) | 14.1% | Strong, sustained sector growth |
| Hardware share (2025) | 56.7% | Sensors, wearables and rugged devices dominate |
| Cloud deployment share (2025) | 61.2% | Primary mode for analytics and cross-site coordination |
| AI technology share (2025) | 58.6% | Core for predictive maintenance and risk detection |
| Top regional drivers | Asia‑Pacific, North America, Europe | Megaprojects, smart infrastructure and regulatory push |
| Main challenges | Costs, legacy integration, cybersecurity, skills | Barriers for smaller firms and scaling pilots to rollouts |
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