The 2026 Residential State of the Trades Report, a survey of 1,000 residential contractors, executives, general managers and directors conducted by third-party research provider Thrive Analytics on behalf of ServiceTitan, Glendale, Calif., reveals the level of artificial intelligence (A.I.) use by residential contractors seeking operational efficiency for growth and profitability.

The report found a discrepancy in A.I. use versus perception: while 74% of contractors consider A.I. an efficiency engine, only 25% of survey respondents are currently using it in their businesses. Reasons given for not using A.I. include operational complexity and uncertainty about where to start, as well as concerns about trust, data privacy, cost and system limitations.

Conversely, 73% of those surveyed believe that early adoption creates a competitive advantage. In fact, measurable results were seen by early adopters, with 48% reporting increased productivity, 45% reporting time savings and 32% reporting improved customer experience.

“Our customers have never been immune to industry pressures, but the difference is how they respond,” said Angie Snow, principal industry advisor at ServiceTitan. “Contractors are increasingly adopting automation and A.I. to run smarter, more efficient operations. Those who focus on execution and efficiency will be best positioned to grow profitably.”

While 66% of contractors cite revenue growth as their primary business goal for 2026, rising costs are affecting that growth. Labor and overhead make up the biggest share of costs and 60% of contractors consider these costs their biggest risks. Labor shortages are a concern for 53% of respondents.

This may be pushing contractors to consider A.I. as part of a move to efficiency-led growth as they look for ways to reduce manual work and improve performance.

Other insights from the survey include that customer retention (53%) now outweighs new customer acquisition (31%). This reflects a broader industry transition: growth is no longer driven by adding more jobs, but by improving execution across every part of the business.

Customers want speed, convenience and transparency. Delays in response time to customers can result in lost business. A.I. is one tool that can help contractors respond faster and communicate clearly.

Increasing efficiency and technician productivity, streamlining workflows and accessing real-time visibility into performance can enable contractors to grow profitably in a highly competitive market. A.I. adoption could offer an advantage if integrated into a contractor’s day-to-day operations, according to ServiceTitan.