Construction Accounting Software Market Share & Size | 2028

The construction accounting software market is expected to grow from US$ 943.91 million in 2022 to US$ 1,217.42 million by 2028; it is expected to grow at a CAGR of 6.3% from 2022 to 2028.

Accounting software is very vital for operating all construction companies successfully. Companies of all sizes continuously deal with numerous subcontractors, contractors, and temporary construction teams, which further complicates procurement, payroll, and other accounting functions. Hence, reliable software is required to guarantee everything, from purchase orders to inventory, and ensure that equipment is tracked, utilized, and replenished accordingly. Construction accounting software offers users several financial management tools such as payroll, general ledger, job costing, audit reporting, and accounts payable and receivable (AP/AR) for small and large construction activities. Certain construction accounting software solutions are developed and focused on specific financial information, while others offer accounting insights into the organization. Through deploying construction accounting software, builders and contractors can enhance project performance by offering all the relevant information to the project managers and minimizing the risk of manual financial calculation error that harms the company.

Construction is one of the important industries growing at an exponential rate globally. Government bodies of countries such as the US, China, and India are investing heavily in developing commercial infrastructures, including airports, hotels, hospitals, universities, and office buildings. With a growing number of infrastructural projects, construction companies emphasize on advanced technologies by using construction accounting software. The booming construction industry and the rising penetration of ERP modules in the construction industry are among the key driving factors for the global construction accounting software market. However, the availability of free construction accounting software for some applications may hinder the construction accounting software market growth. Despite some limitations, the largely untapped market amongst small construction firms is anticipated to drive the construction accounting software market.

The COVID-19 outbreak negatively affected business activities and company revenues worldwide in the construction accounting software industry. Lockdowns imposed by the governments, construction project halts, and supply chain disruptions in the construction industry in various countries negatively impacted the global construction accounting software market growth, especially in 2020.

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Construction Accounting Software Market: Strategic Insights

Market Size Value in	US$ 943.91 Million in 2022
Market Size Value by	US$ 1,217.42 Million by 2028
Growth rate	CAGR of 6.3% from 2022 to 2028
Forecast Period	2022-2028
Base Year	2022

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Impact of COVID-19 Pandemic on Europe Construction Accounting Software Market

The COVID-19 pandemic severely impacted European countries such as Italy, Spain, France, and Germany, with Italy being the most affected. The impact of COVID-19 on the Europe construction industry was severe. Governments across the region-imposed lockdowns to curb the spread of the virus, which resulted in the shutdown of construction projects. This led to a drastic decline in activities across the construction industry, severely affecting the region's construction accounting software market. According to the UK’s Office for Budget Responsibility (OBR), the construction industry saw a 70% reduction in output for Q2 in 2020, causing significant cash flow issues. The status of construction projects worsened during the pandemic. More projects suffered from cost and time overruns, material supply chains were disturbed, unemployment increased, the availability of workers decreased, and health and safety became a bigger concern. All these factors negatively affected the construction accounting software market in Europe. However, in 2021, with the relaxation of lockdown measures, operations resumed in the construction business. Hence, the market for construction accounting software gained momentum. For instance, according to Eurostat, after an unprecedented decline in March and April 2020 (-25.9%), European construction output increased by 20.4% in May 2020. Further, in January 2022, the production level was 1.9% higher than in February 2020. Europe is increasingly involved in initiating various major construction projects, which has increased the adoption of construction accounting software in recent years in Europe.

Lucrative Regions for Construction Accounting Software Market

Market Insights – Construction Accounting Software Market

Growing Construction Industry to Boost Demand for Construction Accounting Software

In the first quarter of 2020, the COVID-19 pandemic inevitably disrupted the activities in the construction industry. However, the construction industry witnessed growth in its activities in the third quarter of 2020. Still, projects in the construction sector for the last quarter depended on the extent to which the pandemic impacted sub-contractors and suppliers in the supply chain. The number of single-family homes and privately‐owned housing under construction increased significantly in the US in the past ten years. According to the new residential construction statistics by the US Census Bureau and the US Department of Housing and Urban Development, privately‐owned housing completions increased by 5.9% from 1,236,000 in January 2022 to 1,309,000 in February 2022. In addition, single‐family housing completions reached 1,034,000 in February 2022 from 922,000 in January 2022, an increase of 12.1%.

The US is witnessing many ongoing mega-construction projects in 2022, reflecting a robust construction industry in the country. A few such construction projects are Samsung semiconductor fabrication facility in Texas (US$ 17 billion), Amazon HQ2 office space in Virginia (US$ 2.5 billion), and the US/Mexico border wall (more than US$ 1 billion). The continuous rise in the number of construction projects in the US generates significant demand for software-based accounting services. Therefore, the growing construction industry drives the construction accounting software market.

Offering-Based Market Insights

Based on offering, the construction accounting software market is bifurcated into solution and services. The solution segment accounted for a larger share of the construction accounting software market in 2021. The software developers provide their customers with web-based construction accounting software, mobile-based construction accounting software, and automatic construction accounting software, among others. These types of construction accounting software are increasingly gaining popularity among end users, and owing to this, the demand for the same is increasing. The solutions mentioned above are integrated with robust software, allowing the entire system to function substantially and shortening the accounting.

Players operating in the construction accounting software market are mainly focused on developing advanced and efficient products.

• In 2020, Viewpoint a Trimble Company and construction management software leader—and the Construction Financial Management Association (CFMA) announced a joint endeavor to provide in-depth visibility into important financial, project, and industry benchmarks to help contractors more reliably deliver projects on time and within budget.
• In 2020, FreshBooks, an accounting software company, announced that its software will now be available on the North American Ingram Micro Cloud Marketplace.

The key players profiled in the construction accounting software market include Acclivity Group LLC; Chetu Inc.; Corecon Technologies Inc.; Deltek Inc.; Foundation Software, LLC; Freshbook; Intuit Inc.; Sage Group; Viewpoint Inc.; and Xero Limited.