Study: Just 10% of A/E Firms Project Growth in 2026
Key Highlights
- Architecture and engineering firms are focusing more on cost control and margins than on expansion;
- Talent shortages and high employee turnover are constraining firm capacity, with staff growth at just 1.2% and turnover above 13%;
- AI adoption has increased to 70%, yet only 38% report measurable business benefits, indicating a need for more strategic implementation;
- Cybersecurity remains a critical concern, with 93% of firms experiencing attack attempts and 20% suffering financial or reputational damage;
- Digital transformation is seen as essential, with 42% of firms fearing market share loss without significant tech upgrades.
HERNDON, VA — May 12, 2026 — Deltek® today released the 47th Annual Deltek Clarity Architecture & Engineering Industry Study, which focuses on how A&E firms operate across the full lifecycle of winning and delivering projects.
Conducted in collaboration with the American Council of Engineering Companies (ACEC), the American Institute of Architects (AIA), and the Society for Marketing Professional Services, the new report surveyed 896 companies and spanned 1,237 participants across the U.S. and Canada. It found that only 10% of A&E firms project revenue growth in 2026. Despite stable demand in 2025, firms are facing increasing pressure to execute work efficiently in the face of growing hidden challenges.
“In the A&E industry, firms are still optimistic, but the focus has shifted from growth to cost control and improving margins. Firms are facing increased constraints around talent, capacity, and profitability,” said Megan Miller, Senior Director, A&E Industry Insights Lead at Deltek. “What we’re seeing is a shift from growth at all costs to more disciplined, performance-driven operations. Leading firms will need to focus on surfacing better data, embedding AI directly into delivery workflows, and bringing discipline to how they manage and measure project performance.”
Demand is steady, but constrained by delivery capacity
According to the Deltek study, A&E firms are planning for growth, yet capacity and productivity pressures are shaping execution. Additionally, talent and productivity pressures are tightening. Limited workforce growth and high employee turnover are constraining scale, underscoring the need for better visibility into project performance throughout the project so firms can adjust as needed. The survey found:
- Firms are forecasting 9.5% net revenue growth in 2026, and backlogs are softening from recent highs;
- Firms reported staff growth of only 1.2%, combined with a persistent high staff turnover rate above 13%;
- Firms reported strong financials, but are showing signs of softening, with utilization declining to just under 60% and operating profit falling to 16.7%.
AI adoption is accelerating, but its impact remains inconsistent
The AI opportunity for A&E firms is shifting from experimenting broadly to operating with intent: clear use cases, integration, and measurable objectives. When thinking about AI, firms are looking for better data, faster decisions, and improved predictability, but some core processes remain manual. Specifically...
- Adoption of AI for A&E firms has risen from 53% to 70% year-over-year, and generative AI usage specifically rose from 64% to 78%;
- However, only 38% of respondents reported measurable positive business impact tied to AI use.
- 39% said it’s too early to see AI-driven benefits or that they’re still piloting the technology, but a majority (59%) agree that successful AI implementation will create a significant competitive advantage and could expand service offerings.
Digital transformation urgency is rising, alongside cyber risk. Firms recognize the competitive stakes but still face practical barriers to operationalizing new technology.
- 93% reported experiencing a cyber attack attempt in the past three years, with 1 in 5 firms reporting a successful attack that resulted in financial or reputational damage;
- 42% believe they could lose market share within two years without significant digital transformation (up from 33% in 2025);
- Firms report that the top AI challenges are where and how to apply emerging tech (62%), integrating AI systems (56%), and data and cybersecurity (52%).
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