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Economic Benefits

The Joint Economic Council estimates the total value of U. S. commercial/industrial construction in 2000 at $171.5 billion1, which excludes significant relevant items such as:

  • Engineered equipment (often half the value of a capital facility)
  • Additions and alterations to existing capital facilities (approximately 45 percent of new facility cost2)
  • Numerous other types of capital facilities such as offshore oil and gas production and transportation.

With these items, capital facility creation and renovation costs in the U. S. approach $230 billion per year (which does not include the value of facilities owned by U. S. companies in foreign countries). The potential benefits of integration and automation technology include:

  • Up to eight percent reduction in costs for facility creation and renovation3
  • Up to 14 percent reduction in project schedules4
  • Repair cost savings ranging from 5-15 percent5
  • Significant collateral benefits to homeland security by providing an industry focal point for improving capital facility resilience to external threats.

In addition, the National Institute of Standards and Technology (NIST) has studied the efficiency losses in the U.S. capital facilities industry resulting from inadequate interoperability among computer-aided design, engineering, and software systems. It estimates the cost of inadequate interoperability in the U.S. capital facilities industry conservatively to be $15.8 billion per year. Although NIST focused on capital facilities, it acknowledges that key stakeholders throughout the construction industry stand to benefit substantially with improved applications of IT and enhanced interoperability. Such improvements should be of interest to owners and operators of capital facilities, design, construction, operation and maintenance, and other providers of professional services as well as and public and private sector research organizations engaged in developing interoperability solutions.


1 US Census Bureau, "Annual Value of Private Non-residential Construction Put in Place by Detailed Types of Construction, 1993-1999".

2 A similar "fixed proportion" estimate using the "1992 Census of the Construction Industry" was used in "Benefits and Costs of Research: A Case Study of Construction Systems Integration and Automation Technologies in Industrial Facilities" by R.E. Chapman, NIST.

3 Construction Industry Institute, 1998. "Cost and Schedule Impacts of Information Management", Research Summary 125-1. Austin, Texas.

4 Construction Industry Institute, 1998. "Cost and Schedule Impacts of Information Management", Research Summary 125-1. Austin, Texas.

5 NIST Office of Applied Economics - Building and Fire Research Laboratory, "Benefits and Costs of Research: A Case Study of Construction Systems Integration and Automation Technologies in Industrial Facilities". R. E. Chapman, June 2000.