The global architectural, engineering and construction market size is expected to grow from USD 7,791.0 million in 2021 to USD 17,570.1 million by 2030, at a CAGR of 10.7% from 2022 to 2030. In architecture, engineering, and construction (AEC), all three industries operate various projects seamlessly and successfully. By integrating these separate entities, architecture, engineering, and construction industries work together more effectively and efficiently to achieve a common goal. AEC Software has various practical applications that facilitate outsourcing and the exchange of information & technology within the industry. It helps standardize these three different sectors and unite them digitally to obtain better building information. This software has a very interactive interface by which engineers can interact with architecture and construction supervisors very easily and obtain all technical information on a single window.
Factors such as growth in infrastructure projects due to rapid urbanization and increased productivity through exchange of information drive the market globally. Furthermore, mandatory rules and regulations applied by government authorities to use AEC software also drive the market. However, the high initial cost of implementing AEC software and lack of skilled workers in the industry restrain the market growth. Furthermore, the rise in the adoption of AR and VR in the construction industry and growth in the implementation of IoT in numerous construction projects are expected to create lucrative opportunities for the growth of the global AEC market during the forecast period.
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COVID-19 Impact on the Global Architectural, Engineering and Construction Market
COVID-19 outbreak has a moderate impact on the growth of the architecture, engineering, and construction market as worldwide lockdown during the COVID-19 has increased wide adoption of AEC software to allow projects to continue in a virtual and digital environment when participants were unable to meet in person. The pandemic has forced us to find safer and smarter ways to construct highways, offices, and homes.
This global public health crisis has confirmed significant demand for new ways of building roads, offices, and homes, using smart construction to tackle design problems, outdated techniques, inefficiency, and environmental challenges. For instance, in November 2020, Autodesk university launched a program to develop return-to-work features in its AEC software, which can help users plan new health guidelines and monitor the air quality index frequently to tackle this situation in workplaces. In addition, the architecture, engineering, and construction market are expected to flourish during the forecast period, as the COVID-19 pandemic has enabled challenges, such as low productivity, affected margins, and drop in R&D investments; hence, construction firms are being forced by to adopt AEC software faster. For instance, in May 2021, Bentley Systems launched online learning and education program of AEC software freely to train its employees and students for using AEC software.
Global Architectural, Engineering and Construction Market Dynamics
Drivers: Several government initiatives regarding the use of AEC software
Various legal government regulations, standards, and policies have been implemented in the construction industry, which positively impacts the market's growth. Governments' policies and regulations for the compulsion of AEC software in the construction of public and private infrastructures across different regions drive the growth of the market. For instance, the Government of the UK proposed a mandate for BIM level 2 for all government projects. Also, countries such as Singapore and the UAE have regulations regarding the usage of AEC software in infrastructure, industrial, and commercial projects.
However, several benefits offered by AEC software for government regulatory authorities such as AEC software streamlines workflows between the department of transports and contractors. It also helps in flood simulation and helps in flood management, which provides numerous opportunities for market growth.
Restraints: High initial cost of implementation of AEC software
One of the factors that restrict the growth of AEC software is pricing issues related to licensing and subscriptions of various modeling services. AEC software is expensive compared to traditional modeling solutions such as AutoCAD, a major limiting factor for the market. Moreover, the adoption of BIM carries an initial financial burden that causes companies to be resistant to BIM, owing to costs associated with buying software and training employees. The process of AEC software implementation is not limited to purchasing software and solutions as it needs to be incorporated in the whole process, i.e., from the planning stage to project delivery, which increases the overall cost of implementation. Moreover, small and mid-sized construction firms prefer AutoCAD solutions over AEC software solutions for modeling services, owing to the high investments required for the latter. Developed countries, especially the U.S. and UK, have witnessed higher adoption of AEC software due to strong economic conditions. However, emerging regions such as Asia-Pacific face problems in implementing AEC software due to the high pricing structure, which acts as the major restrain for the market growth.
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Opportunities: Emergence of AR and VR in the construction industry
Researchers have proposed the use of new technologies such as augmented reality (AR) and virtual reality (VR) to address some of the inherent deficiencies of AEC software and open a new area for enhancement in the AEC industry. AR and VR technologies can potentially enhance AEC software in several aspects, such as real-time on-site communication, which provides potential growth opportunities for the market. In addition, technologies and processes that support AEC software are constantly evolving in the construction industry, making AEC software more attractive. An increase has been witnessed in AEC software integration with AR/VR, where users visualize a virtual world and interact with it. An increase in the popularity of AEC software integration with AR/VR is expected to be an opportunity for market growth during the forecast period. It improves communication among the stakeholders and provides better visualization for engineers, designers, and other stakeholders, enabling a one-to-one, fully immersive experience.
Scope of the Architectural, Engineering, and Construction
The study categorizes the architectural, engineering, and construction market based on component, deployment mode, enterprise size, and end-users at the regional and global levels.
By Component Outlook (Revenue, USD Million, 2017-2030)
By Deployment Mode Outlook (Revenue, USD Million, 2017-2030)
By Enterprise Size Outlook (Revenue, USD Million, 2017-2030)
- Large enterprises
- Small and Medium-sized Enterprises (SMEs)
By End-Users Outlook (Revenue, USD Million, 2017-2030)
- Construction & Architecture Companies
By Region Outlook (Revenue, USD Million, 2017-2030)
- North America (US, Canada, Mexico)
- South America (Brazil, Argentina, Colombia, Peru, Rest of Latin America)
- Europe (Germany, Italy, France, UK, Spain, Poland, Russia, Slovenia, Slovakia, Hungary, Czech Republic, Belgium, the Netherlands, Norway, Sweden, Denmark, Rest of Europe)
- Asia Pacific (China, Japan, India, South Korea, Indonesia, Malaysia, Thailand, Vietnam, Myanmar, Cambodia, the Philippines, Singapore, Australia & New Zealand, Rest of Asia Pacific)
- The Middle East & Africa (Saudi Arabia, UAE, South Africa, Northern Africa, Rest of MEA)
The software segment had the largest market share, by component
Based on components, the market is categorized into software and services. In 2021, the software segment was the highest contributor to the market, with 65% of the market share. The software segment includes different software, platforms, and tools for storing, managing, and analyzing valuable information collected from large data sets. These solutions help organizations leverage the best return from their data by making better decisions or bringing in more revenue.
Most organizations have started adopting AEC software to align all construction processes together, such as data management, which improves the productivity of construction projects. AEC Software has emerged as a multifunctional solution in recent years. It is offered customized versions of software such as Autodesk Revit, ProStructures, DESTINI Estimator, and Vico Office Suite to enhance its market position. This solution has benefited contractors and building professionals to improve their revenue margin, save operating time, and provide comfort to customers. Furthermore, a surge in demand for cloud-based architecture, engineering, and construction software and growth in the integration of BIM solutions in the AEC industry for reducing operational costs to increase profit margins is expected to provide a lucrative opportunity for market growth during the forecast period.
Asia Pacific accounts for the highest CAGR during the forecast period
Region-wise, the global architecture, engineering, and construction market is analyzed across North America, Asia-Pacific, Europe, South America, and the Middle East & Africa. Asia-Pacific is expected to witness a considerable CAGR of 13.5% during the forecast period. Asia-Pacific includes China, Japan, India, Australia, and the Rest of Asia-Pacific. The rest of Asia-Pacific includes Indonesia, Vietnam, the Philippines, Thailand, Bangladesh, South Korea, Sri Lanka, and Singapore. These countries have adopted AEC software due to ongoing technological advancements and new business models.
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Adoption of AEC software is limited in Asia-Pacific compared to developed economies, owing to low awareness and high costs. However, a rapid increase in the construction sector in countries such as China, Singapore, and India is anticipated to present lucrative market opportunities in the future. The growth of AEC software is prominent in this region, owing to the growing construction sector. A surge in the retail sector and emerging infrastructure in the region are expected to be key factors that facilitate the market's growth in this region. Governments in various Asian countries are developing regulations to mandate the adoption of AEC software for construction. For instance, Japan, South Korea, and Singapore have mandated BIM for public buildings. Nemetschek AG signed a three-year contract with the Singapore Institute of Architects (SIA) to create awareness about BIM software and improve architectural skills in Singapore.
Key Market Players
Key players operating in the market include Ansys Inc., Aveva Group Plc, Bentley System, Inc, Autodesk Inc., Hexagon AB, Innovaya, Nemetschek, Newforma, Dassault Systemes, and Trimble, Inc. Furthermore, it highlights strategies of key players to improve their market share and sustain competition.
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