AI tool to curb price shocks and disputes in Danish construction

Danish construction is getting an AI tool meant to make materials prices more predictable. Recent geopolitical tension has pushed up the cost of building materials, which has led to disputes between parties and, in some cases, stalled projects. The tool is meant to counter that by giving the industry a better basis for forecasting prices.

Molio, which runs a price data system for the sector, expects to build the new tool into that system during 2027. The text available here does not explain how the tool works, what data it uses or how accurate its forecasts are.

The problem is illustrated by Søren Cajus, senior chief consultant at DI Byggeri, the construction arm of the Confederation of Danish Industry. He asks the reader to imagine being a contractor who has agreed a price for 30 new detached houses, signed the contract and planned for excavators to start in three months. Then tension around the Strait of Hormuz flares up, and material prices suddenly rise by 30 to 40 percent. A fixed price agreed before such a jump can leave the contractor carrying the loss, and that is the kind of situation that sparks conflict between builders and clients.

The point of the tool is to reduce this uncertainty, so that price shocks do less damage to contracts and building schedules. For a sector that agrees prices well ahead of the actual work, better forecasting could mean fewer disputes and fewer halted projects. How well it works in practice will only become clear after the rollout in 2027.