2025 was a year of contrasts for architecture, engineering, and construction firms. Labor shortages persisted, technology adoption accelerated, and costs continued to rise under ongoing market pressures. As firms look ahead, AEC leaders want to know the 2026 economic outlook: what’s next? This outlook highlights the main trends in technology, workforce, and market uncertainty that will shape how projects are delivered and how firms can prepare.
Quick look
- Tools like AI, BIM, and digital twins are becoming standard in project planning, delivery, and risk mitigation.
- Skilled trade gaps and material price volatility remain top challenges heading into 2026.
- Firms that meet carbon reporting standards and adopt green practices are gaining a competitive edge.
- AEC firms that invest in workforce development, risk planning, and intentional innovation will be best positioned to thrive.
Economic trends to watch in the AEC going into 2026
AI, robotics, and automation in the project lifecycle
Artificial intelligence (AI), robotics, and automation are no longer side experiments—they are becoming integral parts of how construction projects get estimated, scheduled, and built. From autonomous bulldozers to AI-powered scheduling tools, firms are finding ways to cut delays and keep workers safe.
AI is already helping construction projects run more efficiently. A study by McKinsey looked at projects around the world and found that AI can make work up to 20% faster, lower costs by 15%, and help finish jobs 30% quicker. This is because AI helps teams plan better, use time and tools more wisely, and make quicker decisions. However, that growth depends on how well companies can integrate these tools into their workflows and train staff to use them. Firms that succeed are already seeing benefits in accuracy, speed, and cost savings.
Read more: AI is helping prevent construction delays and autonomous construction equipment trends. Both show where adoption is headed and how it will shape project lifecycles in 2026.
Data center and infrastructure demand
The demand for digital infrastructure is showing no signs of slowing down. As companies expand their cloud services and AI workloads, data centers remain one of the fastest-growing segments of the construction industry. Industry reports predict strong growth in data center construction through 2026. JLL’s 2025 Global Data Center Outlook forecasts global capacity will grow by as much as 15% annually, driven by demand for AI and cloud infrastructure. These numbers indicate steady opportunities for firms that specialize in large, complex builds.
National infrastructure investments are also driving this momentum. Government funding for broadband, energy grids, and transportation upgrades adds even more project demand. Firms that can combine expertise in both public infrastructure and private data center builds will be especially well-positioned for growth.
Labor shortages and the skills gap
Even as housing demand cools, labor shortages remain one of the biggest hurdles for AEC firms. Many contractors are still struggling to recruit and retain skilled workers, which slows project timelines and drives up costs. The shortage is most severe in the trades, where retirements are outpacing the number of new entrants into the field.
Reports from groups like the National Association of Home Builders (NAHB) are reinforcing the urgency. Their research indicates that firms must recruit thousands of new workers annually just to keep up with demand. Apprenticeships, training programs, and outreach to younger workers are starting to make a difference, but not fast enough. At the same time, immigrant workers continue to play a critical role in filling gaps across the industry.
Read more: Learn about immigrant workers in construction and the NAHB labor report, both of which highlight the scale of the challenge going into 2026.
Rising material costs and supply chain volatility
Supply chains may be steadier than they were during the height of the pandemic, but volatility is still a concern for AEC firms. Geopolitical tensions, inflation, and higher transportation costs continue to drive up material prices, making budgeting difficult. Lumber, steel, and concrete remain among the most unpredictable, which can quickly add unexpected costs to projects.
To protect margins, many firms are adopting construction finance technology. These tools help track expenses in real-time, improve cash flow, and provide early warnings when costs start to rise. They also give project managers better insight into contract planning and supplier negotiations.
Sustainability mandates and carbon reporting
Governments and clients are raising the sustainability bar, and by 2026, more firms will be expected to provide carbon reporting and prove real progress toward net-zero goals. This shift is changing how projects are designed, financed, and delivered.
Firms that get ahead of these requirements are already seeing it pay off. Adopting sustainable building design and green practices helps companies win new work and build stronger client trust. From low-carbon materials to energy-efficient systems, early adopters are turning sustainable construction trends into a competitive advantage.
Remote and hybrid collaboration
AEC firms are continually refining their approach to managing remote and hybrid work. This shift is especially crucial for design and engineering teams, where collaboration frequently occurs across different offices and time zones. Cloud-based project management tools and virtual design platforms are no longer optional—they are now standard for firms that want to stay competitive.
As companies expand into new regions, the need for seamless digital communication will only grow. Investments in stronger digital infrastructure enable teams to share updates instantly, avoid costly miscommunications, and keep projects moving smoothly. Firms that embrace these models are finding they can tap into wider talent pools.
Digital twins and BIM as standard practice
Digital twins and building information modeling (BIM) are moving from advanced tools to everyday standards. What was once cutting-edge is now expected on many projects, especially larger and more complex builds. These tools give project teams a live view of performance, helping them catch problems before they grow into costly setbacks.
Firms that use digital twins and BIM report better coordination among architects, engineers, and contractors. The result is fewer errors, less rework, and faster delivery timelines. As owners and clients become more familiar with these technologies, the pressure to adopt them will only increase. By 2026, using digital twins and BIM may no longer be a choice but a requirement for staying competitive.
Risk management and planning for uncertainty
Global events over the past few years have shown how quickly conditions can change. From supply chain disruptions to inflation and market slowdowns, AEC firms are learning that risk planning must be an integral part of everyday operations.
The firms that do best are those that prepare for multiple outcomes. Diversifying portfolios, building flexible contracts, and keeping contingency plans ready are primary strategies. Scenario-based planning, where leaders map out “what if” scenarios, helps firms remain steady when challenges arise. As we enter 2026, companies that prioritize risk management will be better equipped to handle volatility and keep projects on track.
How to prepare for 2026 and succeed in a time of uncertainty
Adopt technology with intention
AI, BIM, and digital twins are powerful tools, but success depends on how they are rolled out. Jumping on the latest tech without a clear plan often leads to wasted time and money. Firms should focus on tools that solve real problems, are easy for staff to use, and can be integrated smoothly into existing workflows.
Training is just as important as the technology itself. When teams understand how to use new systems, adoption sticks and productivity improves. The most successful firms are the ones that balance innovation with practicality, making sure every investment has a clear purpose and measurable results.
Build workforce resilience
Workforce challenges will not disappear in 2026, which is why resilience matters. Firms that invest in apprenticeships and training programs create steady pipelines of new talent. Upskilling existing employees helps teams stay adaptable as technology and project needs evolve.
Wellness and safety programs are also developing workforce trends to keep workers engaged. When employees feel supported and safe on the job, they are more likely to stay. In a competitive labor market, firms that prioritize people will have the edge.
Strengthen financial and risk planning
Financial strength is one of the best defenses against uncertainty. AEC leaders who build flexibility into their contracts and diversify their revenue streams will be better prepared for shifts in the market. Keeping healthy cash reserves can also help firms manage sudden cost spikes or delays without putting projects at risk.
Proactive supply chain planning is another important piece. Building relationships with multiple suppliers and closely monitoring material markets can help reduce the impact of shortages or price swings.
Treat sustainability as a competitive edge
Sustainability is shifting from a requirement to a true competitive advantage. Firms that meet net-zero targets and prepare for carbon reporting early are more likely to win projects and strengthen client relationships. Owners and developers want partners who can prove their green credentials, not just talk about them.
Taking action now also positions firms ahead of tightening regulations. From low-carbon building materials to energy-efficient systems, early adopters are showing how sustainable building practices and sustainable building design drive trust and business growth.
Embrace agility and innovation
The AEC firms most likely to succeed in 2026 will be the ones that adapt quickly. Innovation tends to follow steady improvements that make everyday work easier, like streamlining communication, improving planning, or adjusting how jobs are managed. Whether it’s testing a new scheduling tool or streamlining a slow approval process, flexibility is becoming increasingly essential.
Leaders who encourage flexibility and continuous learning create teams that can handle uncertainty with confidence. By staying open to new ideas and adjusting their strategies as needed, firms put themselves in the best position to grow, regardless of what the market brings.
Bottom line
The 2026 economic outlook for AEC firms shows both opportunity and risk. Technology adoption, workforce resilience, and sustainability practices will drive growth, while labor shortages, rising costs, and market uncertainty will continue to challenge the industry. Firms that prepare now will be well-positioned to lead the next cycle.
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