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2021
Aec Market

AEC Market by Component (Solution, Service), Deployment Mode (On-Premise and Cloud), Enterprise Size (Small & Medium Scale Enterprises and Large Scale Enterprises), and Application (Construction & Architecture Companies, Education, And Others): Global Opportunity Analysis and Industry Forecast, 2021–2028
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A11590
Pages: 270
Jun 2021 | 5895 Views
Author(s) : Rachita Rake & Shreyas Wadodkar
Tables: 131
Charts: 74
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COVID-19

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AEC Market Statistics—2028

The global AEC market size was valued at $7,188.00 million in 2020, and is projected to reach $15,842.00 million by 2028, growing at a CAGR of 10.7% from 2021 to 2028. Architecture, engineering, and construction software is used by real estate companies, construction firms, surveyors, interior designer, and mechanical & electrical piping engineers for effective project life cycle management. Key objective of architecture, engineering, and construction software is to enhance project performance and produce better outcomes. AEC helps construction managers to gather data and information from relevant disciplines and communicate more effectively. Enhanced data communication and coordination among various stakeholders, architectures, and construction supervisors is coupled with improved construction productivity to provide a leading edge to AEC users.  

COVID-19 outbreak has a moderate impact on 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 even when participants were unable to meet in person. The pandemic has forced to find safer and smarter ways for construction of highways, offices, and homes which is expected to increase the adoption of AEC software among end users.

On the basis of component, the software segment dominated the overall AEC market in 2020, and is expected to continue this trend during the forecast period. This is attributed to increase in construction projects and adoption of software such as building information and modeling software in the AEC industry. Most construction and infrastructure companies have started adopting these solutions to integrate all construction processes together such as procurement and data management, which improves overall productivity of construction projects. However, the services segment is expected to witness highest growth in the upcoming years as there has been an increase in adoption of services among end users as it ensures effective functioning of AEC software and platforms. In addition, high implementation of AEC creates need for services in the market, which is expected to drive the market during forecast period.

Architecture,-Engineering-&-construction-Market-2021-2028

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Depending on deployment mode, the on-premise segment dominated the AEC market share in 2020, and is expected to continue this trend during the forecast period. The growth of this segment is attributed to rise in concerns about security of data associated with construction projects, which is highly valuable. Larger firms in the AEC industry such as Autodesk Inc. and Nemetschek AG provide on-premise software for their customers in industrial, infrastructure, and residential sectors. However, the cloud segment is expected to witness highest growth in the upcoming years as it does not involve capital cost as well as has low maintenance requirements, hence is most preferred by mid-sized financial institutions. Rise in adoption of cloud-based architecture due to the COVID-19 pandemic among both large and mid-sized enterprises further fuels growth of the market.

On the basis of enterprise size, the large enterprises segment dominated the market share globally in 2020, and is expected to continue the same during the forecast period. The growth is attributed to rise in use of cutting-edge technology such as augmented reality and virtual reality in large scale enterprises, which needs AEC. However, the small & medium scale enterprise segment is growing at a high rate as these enterprises are facing lots of competitive pressure in emerging countries, which forces them to adopt AEC software for better co-ordination in the AEC industry.

North America generated highest revenue in 2019, and is expected to continue this trend during the forecast period. This is attributed to rapid growth in the construction and infrastructure sector such as adoption of artificial intelligence and rise in need for automation in the construction and architecture sector. However, Asia-Pacific is expected to exhibit highest growth during the AEC market forecast period as adoption of AEC software is prominent in this region, owing to growth in the construction sector in this region. Surge in multi-story buildings and skyscrapers as well as ongoing developments in infrastructure in this region are expected to be key factors facilitating growth of the AEC market. 

Governments of various Asian countries are implementing regulations to mandate adoption of architecture, engineering, and construction software for constructions. For instance, India, Japan, and South Korea have mandated use of architecture, engineering, and construction software for public buildings. For instance, in April 2019, Capgemini China signed an agreement with Autodesk Inc. to provide cloud-based AEC and BIM platform to customers in the region, which, in turn, drives the market growth.

The report focuses on the growth prospects, restraints, and AEC market analysis. The study provides Porter’s five forces analysis of Architecture, engineering, and construction industry to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the AEC market trends.

Segment review

AEC market is segmented into component, deployment mode, enterprise size, Application, and region. By component, it is bifurcated into software and service. Depending on deployment mode, it is categorized into on-premise and cloud. On the basis of enterprise size, it is categorized into large enterprises and small & medium size enterprises. As per application, it is classified into construction & architecture companies, education, and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

AEC Market
By Component

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Service segment is projected as one of the most lucrative segments.

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Impact of COVID-19 on the AEC market

The outbreak of COVID-19 has affected communities globally while governments and companies are trying their best to respond faster to the challenges posed by this pandemic. However, construction sites in various countries have shut down. On the other hand, organizations across the construction industry are shifting to remote ways of working. For instance, engineers and designers rely on digital collaboration tools such as AEC software and building information modeling (BIM) software. Contractors and engineers across the globe are using augmented reality and virtual reality simulation to re-optimize schedules and re-plan projects. Furthermore, integrated digital-twin solutions are being developed to be used for end-to-end support from project concept to implementation. Surge in online services has been observed in adoption of online channels by contractors for monitoring well-being of their employees through apps, managing scarce resources more accurately, ordering construction materials, and maintaining cash flow. Moreover, the construction industry faced lack of skilled labor before the crisis. With the prospect of rolling physical distancing measures as well as restrictions on cross-border movement of labor, shortage of skilled labor is expected to become even more acute. Hence, use of digital tools such as AR/VR simulation, real-time progress tracking, advanced schedule optimization, and digital workflow management increased significantly.

For similar reasons, increase in R&D spending is observed across the industry to develop new standardized building systems to automate and speed up elements of design and construction. In emerging countries such as India lots of infrastructure, road development, and railway upgradation projects have been pending due to lockdown but these projects are expected to complete in the upcoming years, which would help the market grow during the forecast period.

AEC Market
By End User

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Other segment is projected as one of the most lucrative segments.

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Top impacting factors    

Numerous factors such as growth in infrastructure projects, owing to rapid urbanization and increase in productivity through exchange of information drive the market globally. Furthermore, mandatory rules and regulations applied by government authorities for the use of AEC software also drives the market globally. However, high initial cost of implementation of AEC software and lack of skilled workers in the industry restrain the market globally. Furthermore, growth in adoption of AR and VR in the construction industry and rise in implementation of IoT in numerous construction projects are expected to create AEC market opportunity market during the forecast period.

Increase in infrastructure projects 

As population is increasing globally, demand for construction of buildings, malls, and offices, owing to launch of projects such as smart cities and high-speed roads, is on the rise. Hence, to operate these projects seamlessly and efficiently, key players are adopting AEC software. The construction industry has witnessed rapid growth in the Middle East and in most developing countries of Asia- Pacific such as India and China. For instance, in the Saudi Arabia in the year 2017, a considerable number of key projects were announced such as King Abdullah Economic City in Rabigh, which is estimated to cost around $27 million. In addition, in the UAE Abu Dhabi improvement authority announced Airport Expansion with a budget allocation of $6.8 million and a project of $500 million for Presidential Palace in Al-Ras Al—Akhdar. These upcoming projects are expected to drive adoption of engineering software including CAD, CAM, BIM, and AEC among End User, which will boost the AEC market growth. Furthermore, in India the construction industry, in value terms, is expected to record a CAGR of 15.7% to reach $ 738.5 billion by 2022, which is anticipated to be a significant factor for adoption of AEC software in the region. In addition, some of the key initiatives such as Make in India and construction of smart cities by the government of India are expected to fuel growth of the construction industry in this region. Moreover, the Global Construction Report 2025 stated that developing Asian countries would account for 13.5% of the global construction development in the coming years. 

AEC Market
By Region

2028
North America 
Europe
Asia-pacific
Lamea

Asia-Pacific is projected as one of the most significant region.

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Key Benefits For Stakeholders

  • The study provides an in-depth analysis of AEC market along with the current trends and future estimations to elucidate the imminent investment pockets.
  • Information about key drivers, restraints, and opportunities and their impact analysis on the AEC market size is provided.
  • Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the architecture, engineering, and construction (AEC) market.
  • The quantitative analysis of the AEC market from 2020 to 2028 is provided to determine the architecture, engineering, and construction (AEC) industry potential.

Key Market Segments

By Component

  • Solution
  • Service

By Deployment Mode

  • On-premise
  • Cloud

By Enterprise size 

  • Large enterprises
  • Small and Medium sized Enterprises (SMEs)

By Application

  • Construction & Architecture Companies
  • Education
  • Others

By Region

  • North America
    • U.S.
    • Canada
  • Europe 
    • UK
    • Germany 
    • France
    • Russia
    • Italy
    • Rest of Europe
  • Asia-Pacific 
    • China
    • India
    • Japan
    • Australia
    • Rest of Asia-Pacific
  • LAMEA
    • Latin America 
    • Middle East
    • Africa

Key Market Players Profiled In The Report Of Architecture, Engineering, And Construction Market

  • AUTODESK INC.
  • AVEVA GROUP PLC.
  • BENTLEY SYSTEM, INC.
  • DASSAULT SYSTEMES
  • TRIMBLE, INC.
  • ANSYS
  • NEMETSCHEK
  • Hexagon AB
  • Newforma
  • Innovaya
 

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In accordance with several interviews that were conducted with top level CXOs, adoption of architecture, engineering, and construction software has increased over the period of time due to growing construction industry and evolving supportive government regulations across the globe. In addition, ability of the software to improve productivity of engineers on construction sites and reduction in conflicts in construction projects is increasing its popularity among End User. Furthermore, many small & medium size enterprises are adopting cloud-based building information modelling solutions to reduce cost of construction projects and increase safety of workers on construction sites. Moreover, owing to COVID-19, it is not possible to visit construction sites physically, hence engineers are using software-based tools to monitor operations at construction sites.

According to CXOs of leading companies, increase in economic strength of developing nations such as China, India, and Japan is expected to provide lucrative opportunities for the market growth. North America is expected to dominate the market during the forecast period. Moreover, emerging countries in Asia-Pacific and Latin America are projected to offer significant growth opportunities during the forecast period. The global players are focused on product development and increasing their geographical presence, owing to growth in competition among local vendors, in terms of features, quality, and price. In addition, these players are adopting various business strategies to enhance their product offerings and strengthen their foothold in the market. For instance, in November 2020, Autodesk Inc. acquired Spacemaker, a Norwegian start-up company that provides artificial intelligence platform for the construction industry, for $240 million. It is expected to help Autodesk provide transparency, better collaboration, and efficient bidding process, essential for delivering complex construction projects. The acquisition is expected to help Autodesk address requests from the architect community for analysis tools that support informed design or outcome-based design

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