Construction companies with less than $250 million in revenue invest about 1.6% of it on information technology, according to Gartner Research. Meanwhile, construction firms with $10 billion in revenue on average spend only 1.1% on IT. The construction industry is dead last in IT spending compared to 14 other industries measured by Gartner. The federal government and banking spend the most on IT (see chart).
For firms struggling through the construction recession, underspending on IT may be a shortsighted strategy. According to the Bureau of Labor Statistics, 70% of U.S. productivity growth comes from IT. So, underinvesting in IT for extended periods could put firms at a competitive disadvantage. Operating IT systems past their end-of-life also could increase risk. Further, Gartner reports that 30% of net income is affected by IT economies of scale, so technologies optimized across the workforce may also improve profitability.