Contractor AI Adoption Surges in 2026, Report Finds

Survey of 1,000+ construction leaders shows firms moving past experimentation as AI takes hold in cost estimation, bid management and project planning.

Chart "Where AI Provides Value" — ServiceTitan

Adoption of artificial intelligence among commercial contractors has surged from 17% to 38% in just one year as firms turn to technology to manage rising costs and improve operations, according to a new industry report.

The ServiceTitan 2026 Commercial Specialty Contractor Industry Report, based on a survey of more than 1,000 construction leaders, found that 38% of contractors now report measurable business impact from AI, up from 17% in 2025.

AI is increasingly being applied to core functions such as cost estimation and budgeting (24%) and bid management (22%), signaling a shift from experimentation to operational use.

"The next AI leaders in the commercial and construction markets will be defined by how seamlessly intelligence is embedded across the entire workflow," said Alex Kablanian, senior vice president and general manager of commercial and construction markets at ServiceTitan.

The report found contractors entering 2026 with steady demand, with 35% reporting at least nine months of secured work and 41% holding more than a year of backlog. Still, profitability remains under pressure.

Rising labor and overhead costs, material price increases and ongoing workforce shortages continue to challenge margins. Seventy-one percent of contractors reported rising wages, up from 55% the previous year.

In response, firms are prioritizing revenue growth (61%) and improved project margins (45%), while focusing on faster billing cycles and tighter labor cost controls.

Cash flow management is also shifting. Sixty-seven percent of contractors said they rely on lines of credit to fund materials, and 56% are negotiating extended supplier payment terms.

The report also highlighted fragmented technology systems across the industry, with only 20% of contractors operating on a single platform, limiting visibility into project and financial performance.

As cost pressures persist, contractors are increasingly turning to integrated digital tools and AI to improve efficiency, manage risk and maintain profitability.