Cost control is top of mind for leaders in architecture, engineering, construction, and operations (AECO) with 34% saying it is a top challenge. Talent is also a persistent obstacle, with 58% of leaders saying lack of skilled talent is hindering growth.

Echoing global findings, leaders in AECO feel the global landscape is more uncertain (64%) and they also feel less prepared to handle unforeseen changes. Sentiment about AI is also down in AECO, with just 68% of leaders saying AI will enhance their industry, down from 80% last year, and 46% agreeing that AI will destabilize their industry.

Despite this uncertainty, business leaders in AECO are still feeling bullish in some areas as they identify opportunity amid disruption. Although overall investments are down year-over-year, 64% of leaders say they will increase overall future investments. Sustainability is experiencing a surge of optimism, with 95% of leaders saying their organizations are taking steps to be more sustainable, and 39% of AECO respondents are using AI to enable sustainability.

Utilities and telecom are least concerned about AI

Percentage of respondents who agree to statements: 1. AI will destabilize my industry. 2. AI will enhance my industry. Survey question: When you think about artificial intelligence (AI) in your industry and company, to what extent do you agree or disagree with the following? 5-point sale. Top two = agree.

In AECO industries, leaders in utilities and telecom, one of the most enthusiastic sectors about the potential for AI, are least concerned about industry destabilization, with 70% saying AI will enhance their industry. Seen less as a replacement for current workers than as a tool to enhance their work, AI is being used by utility firms to predict service disruptions and plan preventative maintenance, lowering energy consumption and optimizing grid usage.

On the flip side, architecture sees the least potential in AI technology, with just 57% saying AI will enhance their industry, well below the global average.

“We are actually quite optimistic about AI and the future of AI in our industry. There is big concern about AI taking over the industry and changing it completely and potentially putting architectural firms out of business. We actually look at this as another step, albeit a potentially exponential jump, in the evolution of how we will work with new innovative tools that will help in streamlining our design activities and providing us with more intelligent ways to create, improve how we design buildings, and improve overall productivity and efficiency.”

– Ammar Al Assam, CEO, Dewan Architects, an architecture firm headquartered in the UAE

Construction services is least concerned about AI, most concerned about cost

Percentage of respondents who selected “cost control and cost management” and “technological advancements including AI” as their top challenge. Survey question: What are the top challenges your company or organization faces today? 13 response options.

Within AECO, leaders in construction services are most concerned with cost control (40%) and less concerned with technology advancements and AI (23%). Although the contrast is less dramatic, other segments—including oil and gas, architecture services, and building owners—are also more preoccupied with costs than with technology and AI.

On the other hand, a higher percentage of respondents working in utilities and telecom and engineering services sees technology, including AI, (39%) as a top challenge rather than costs (31%). This isn’t surprising for utilities, given that the sector is historically slower to adopt new technologies amid increased security concerns around data.

Norconsult: New Sotra suspension bridge

Solution spotlight

Norway is one country embracing AI in AECO. Construction engineering company Norconsult designed the Sotra suspension bridge using a fully digital approach. The project used a cloud platform for 3D modeling, reporting, cost control, and facility management, eliminating traditional drawings. The digital model minimized errors and provided clear visibility into progress, saving time and effort, while automation streamlined repetitive tasks. This led to significant cost control, reducing hand drawings by 99.5% and cutting drawings from 4,000 to just 15. APIs facilitated efficient data management and workflow integration.

Architecture services sees large shift in both preparedness and uncertainty

Percentage of respondents who agree to statements: 1. My company is well prepared to handle unforeseen future macroeconomic and geopolitical changes. 2. The future global landscape feels more uncertain now than 3 years ago. 5-point scale. Top two = agree.

AECO, in general, is feeling less prepared to handle unforeseen changes than the previous year, with architecture services seeing the steepest decline, from 74% to 46%, representing a 38% change year-over-year. Leaders in architecture services not only feel their organizations are less prepared to handle unforeseen changes, but their confidence in the future has also fallen—there is a 21-point year-over-year increase in the number of leaders who see the future as uncertain. From increased materials costs to the shifting regulatory landscape and disruption from AI, architecture services is currently seeing, and feeling, the effects of ongoing global uncertainty.

“The future appears to be progressing towards a significant divide between technology adopters and nonadopters, with this gap continually widening. This presents opportunities for smaller companies to leverage emerging technologies and establish new trends. However, it is important to acknowledge that integrating such technology on a large scale within established companies may not always be feasible.”

– Oliver Hall, BIM Manager - Senior Staff, Stefan Antoni Olmesdahl Truen Architects (SAOTA), an architecture and design firm headquartered in South Africa

Civil infrastructure sees dramatic technical skills shortage

Civil infrastructure organizations are experiencing a major increase in their skills gap. This year, 61% of leaders in the sector say the right technical skills are hard to find, up from 28% in 2024 and representing a 118% year-over-year change. Concerns about an aging workforce are compounded by the industry’s difficulty in attracting young talent who see civil engineering as less technologically advanced than other sectors.

“Recruiting younger generations is a challenge. People don’t think our industry is cool enough,” said Linn Areno, head of digital development at Skanska Sweden, a global project development and construction company. “Personally, it’s quite hard because everyone else is depending on our industry. You don’t have anything if you don’t have roads, if you don’t have houses. Younger generations want to do cool computer stuff.” To combat this image and attract future generations, Skanska invests in outreach programs for students of all ages, from university students to preschoolers.

“One problem is education. Nowadays, we are making people more general instead of training for specialties. Today, we see mechanical engineers instead of, say, a mechanical engineer for the utility industry or a mechanical engineer for the automotive industry. So for us, we say that it will take an engineer one to three years, at least, to be ready to work effectively.”

– Vinicius Prata, Leader of the Power Generation BIM Committee, Eletrobras, an electric power generation and transmission company headquartered in Brazil

Architecture services, oil and gas see sharpest decline in future investment level

Survey question: How do you think your company or organization’s level of investment will shift over the next 3 years? 5-point scale. Top two = increase.

While all sectors in AECO are seeing a decline in the percentage of leaders that will increase future investments, architecture services and oil and gas are seeing the sharpest decline.

Architecture services, specifically, is reining in spending, with just 55% of leaders in this sector saying they will increase investments in the next three years, a 28% decline year-over-year. This makes sense when considering the unique confluence of pressures for the sector from rising materials and labor costs to supply-chain fragility.

Oil and gas also saw a steep year-over-year decline in spending, with 61% of leaders saying they will increase investments, compared to 84% in 2024. Oil producers are taking a more conservative approach to spending owing to a host of factors—concerns about oversupply amid a tightening of consumer spending, for example—and are reducing capital investments and focusing on improving operational efficiencies.

“We service the Australian market, and, other than New Zealand, we don’t export. We are somewhat of an island, and even our island is seeing the effects of what’s going on in the world. Construction is down, investment is down, and available funding is down. That’s a reaction to what’s going on in the world.”

– Sharmy Francis, Manager – Innovation, InfraBuild, a steel manufacturing company headquartered in Australia

Cost control is top of mind for leaders in product design and manufacturing (D&M), with 35% saying it’s a top challenge. Talent is also a persistent obstacle, with 59% of leaders saying lack of skilled talent is hindering growth.

Echoing global findings, leaders in D&M feel the global landscape is more uncertain (62%) and they also feel less prepared to handle unforeseen changes. Sentiment about AI is also down in D&M, with just 69% of leaders saying AI will enhance their industry, down from 80% last year, and 44% agreeing that AI will destabilize their industry.

Despite this uncertainty, business leaders in D&M are still feeling bullish in some areas as they identify opportunity amid disruption. Although overall investments are down year-over-year, 64% of leaders say they will increase overall future investments. Sustainability is experiencing a surge of optimism, with 95% of leaders saying their organizations are taking steps to be more sustainable, and 37% of D&M respondents are using AI to enable sustainability.

Industrial machinery leads the way for AI-enabled sustainability efforts

Percentage of respondents who selected “Used AI to be more sustainable.” Survey question: What changes has your company or organization already made to be more sustainable? Select all that apply. 12 response options.

Industrial machinery is currently the sector in product design and manufacturing that is using AI the most to enable sustainable outcomes. This sector also showed the steepest year-over-year increase in AI use for sustainability, with 44% of organizations using the technology to achieve their goals. Leaders in industrial machinery say they are using AI starting at the design phase, baking sustainability into the entire project from inception.

“AI has more elements that can be used to judge whether or not something can actually be applied, rather than just conceptual presentations.”

– Hidenori Saito, Department Manager of the DX Strategy Division and BIM Management Office, Takasago Thermal Engineering, an air conditioning equipment company headquartered in Japan

Yamaha EV: Using generative AI to design a unique prototype

Solution spotlight

Yamaha Motor and Final Aim collaborated to design the Concept 451, an electric utility vehicle tailored for agricultural and mountainous terrain, unveiled at the Tokyo Auto Salon 2024. Using generative AI, Final Aim explored extensive design possibilities, creating more than 2,000 concepts. The AI facilitated communication and iterative design processes, resulting in a unique, asymmetrical electric vehicle (EV) structure. Final Aim also developed a blockchain-based platform, Final Design, to securely manage design data and intellectual property. This project highlights generative AI’s potential in design, addressing both creative and practical challenges while safeguarding intellectual property through innovative technology.

Life sciences sees possibility amid disruption

Percentage of respondents who agree to statements: 1. AI will destabilize my industry 2. AI will enhance my industry. Survey question: When you think about artificial intelligence (AI) in your industry and company, to what extent do you agree or disagree with the following? 5-point scale. Top two = agree.

For product design and manufacturing companies, concern about industry destabilization from AI is lower than the global average. Similarly, the positive sentiment about AI’s ability to enhance their industry is generally above average, suggesting D&M, as a whole, is benefiting from the implementation of AI solutions at their organizations.

One standout sector is life sciences, which is both most concerned about disruption (57%) and most enthusiastic about AI enhancing the industry (75%). This seeming contradiction implies that leaders in life sciences see AI as an inevitable disruption but one that will come with great benefits.

“Certainly, there are AI tools that help with creativity, but I don’t think AI will ever take over an engineer or a scientist or a designer’s job. I think AI will be a fantastic assistant and boost efficiency and productivity.”

– Blaine Buenger, Technology Director, Infrastructure Solutions, Foth, a science, engineering, and technology company headquartered in the US

Industrial machinery sees dramatic jump in skills shortage

The industrial machinery sector saw the largest increase in the number of leaders who say they struggle to find the right technical skills—up to 65% from 25% in 2024, representing a dramatic 160% increase year-over-year. And while it also had one of the highest percentages of leaders saying their companies plan to invest more in digital skills training, that figure is down 16 points to 70% this year. Leaders cite the old-fashioned image of the sector as a reason why they are struggling to find talent—younger employees, they say, are drawn to industries they see as more technologically advanced.

To address this issue, leaders in the sector say they are focused on outreach, recruitment, and internship programs with students to attract them to the industry right at the start of their careers.

“As with the construction industry, as a whole, there is a shortage of skilled workers, and in Japan, the issue of how to respond to the Work Style Reform is a challenge. But as a means of solving this, we are introducing new technology to improve productivity.”

– Hidenori Saito, Department Manager of the DX Strategy Division and BIM Management Office, Takasago Thermal Engineering, an air conditioning equipment company headquartered in Japan

Revolution Workshop: Offering training and support

Solution spotlight

Revolution Workshop’s workforce development programs offer more than jobs; they provide a pathway to stable, prosperous futures for people from underserved neighborhoods in Chicago’s West and South sides. Revolution’s Trade Pathways and Professional Pathways programs focus on practical skills training and holistic support, including financial literacy, conflict resolution, and goal setting. This comprehensive approach prepares participants for careers in construction, ensuring they are job-ready and able to succeed. The Professional Pathways program, in particular, offers training in engineering, architecture, and construction management, addressing the industry’s need for new skilled workers as older ones retire. By fostering relationships with employers and providing tailored training, Revolution Workshop bridges the gap between supply and demand in the construction workforce, promoting diversity and helping communities thrive.

Cost control and technology are top of mind for leaders in media, entertainment, and gaming (M&E) with 31% saying they are a top challenge. Talent is also a persistent obstacle, with 56% of leaders saying lack of skilled talent is hindering growth.

Echoing global findings, leaders in M&E feel the global landscape is more uncertain (69%) and they also feel less prepared to handle unforeseen changes. Sentiment about AI is also down in M&E, with just 71% of leaders saying AI will enhance their industry, down from 76% last year, and 55% agreeing that AI will destabilize their industry.

Despite this uncertainty, business leaders in M&E are still feeling bullish in some areas as they identify opportunity amid disruption. Although overall investments are down year-over-year, 73% of leaders say they will increase overall future investments. Sustainability is experiencing a surge of optimism, with 96% of leaders saying their organizations are taking steps to be more sustainable, and 41% of M&E respondents are using AI to enable sustainability.

Media and entertainment is experiencing the most AI disruption and the most benefit

Leaders in M&E are 25% more likely than leaders in D&M and 20% more likely than AECO leaders to say that AI will destabilize their industry. In fact, the entertainment industry is already seeing the effects of AI disruption, including strikes from writers and actors protesting the use of AI and game developers seeking unionization to ensure AI doesn’t endanger job security. But amid this concern is an optimism for AI in the future of the industry—71% of M&E leaders think AI will enhance their industry, compared to 69% in product design and manufacturing and 68% in architecture, engineering, construction, and operations.

“We use AI to ideate for discussions. But there are no big studios that are distributors who touch AI-generated images, because of the legal issues. Who owns the intellectual right to the material, and where did it plagiarize it from? As a company, at this point, we are consciously staying away from using it for more than ideating. We do not create any final images, pixels, or writing with those tools.”

– Veerendra Patil, Founder and Creative Director, Zebu Animation, an animation studio headquartered in India
“We're advancing rapidly with AI, achieving significant milestones in our business. For instance, we've developed an AI-based, real-time cloth simulation for our customers in gaming, media and entertainment.”

– Kenneth Ryu, CSO, z-emotion, a 3D fashiontech company headquartered in South Korea
“We use AI to ideate for discussions. But there are no big studios that are distributors who touch AI-generated images, because of the legal issues. Who owns the intellectual right to the material, and where did it plagiarize it from? As a company, at this point, we are consciously staying away from using it for more than ideating. We do not create any final images, pixels, or writing with those tools.”

– Veerendra Patil, Founder and Creative Director, Zebu Animation, an animation studio headquartered in India
“We're advancing rapidly with AI, achieving significant milestones in our business. For instance, we've developed an AI-based, real-time cloth simulation for our customers in gaming, media and entertainment.”

– Kenneth Ryu, CSO, z-emotion, a 3D fashiontech company headquartered in South Korea
“We use AI to ideate for discussions. But there are no big studios that are distributors who touch AI-generated images, because of the legal issues. Who owns the intellectual right to the material, and where did it plagiarize it from? As a company, at this point, we are consciously staying away from using it for more than ideating. We do not create any final images, pixels, or writing with those tools.”

– Veerendra Patil, Founder and Creative Director, Zebu Animation, an animation studio headquartered in India
“We're advancing rapidly with AI, achieving significant milestones in our business. For instance, we've developed an AI-based, real-time cloth simulation for our customers in gaming, media and entertainment.”

– Kenneth Ryu, CSO, z-emotion, a 3D fashiontech company headquartered in South Korea

Untold Studios: integrating emerging technology

Solution spotlight

Since its launch in 2018, Untold Studios—the world’s first fully cloud-based creative studio—has leveraged software for scalable collaboration in animation and visual effects across music, film, TV, and advertising. This approach has attracted top global talent, growing the team from 16 to more than 240 in five years and earning it multiple awards nominations, including BAFTA, Emma, and Grammy. Untold Studios integrates emerging technologies such as universal scene description (USD) into its workflows, allowing the company to scale quickly and manipulate data more precisely.

Games sector sees the biggest challenges with finding skilled talent

Percentage of respondents who agree to statements: 1. New employees with the right technical skills are difficult to find. 2. In the next 3 years, my company is planning to invest more in digital skills training. 5-point scale. Top two = agree.

Media and entertainment leaders are no stranger to the talent crunch, with 59% saying they struggle to find the right technical skills.

Driven by recent significant layoffs across the sector, games is seeing the largest talent shortage, with 62% of leaders agreeing that it’s difficult to find skilled talent, up from 36% last year, but film and TV (59%) and advertising (57%) are also feeling the talent crunch.

To address this gap, leaders in M&E plan to increase investment in digital skills training, contrary to the drop in digital investments seen across AECO and D&M. This makes sense when considering the outsize and disruptive impact AI and emerging technologies have had on the industry, from intellectual property concerns to massive writer and actor strikes. It suggests the industry is looking to minimize future disruption and keep pace with rapidly advancing technology in the sector.

“We created a program called Learn OK Please because tools are changing. Our 2D animation artists are learning how to use 3D software, and our 3D artists are learning how to use illustration. We do a lot of cross-training. The era of super specialization is over. You need to have multiskilled artists and dependency departments. If you’re doing texturing, you should be able to understand lighting, surfacing, and basic compositing.”

– Veerendra Patil, Founder and Creative Director, Zebu Animation Studios, an animation studio headquartered in India

Explore by industry: AECO, D&M, and M&E

Utilities and telecom are least concerned about AI

Construction services is least concerned about AI, most concerned about cost

Norconsult: New Sotra suspension bridge

Solution spotlight

Architecture services sees large shift in both preparedness and uncertainty

Civil infrastructure sees dramatic technical skills shortage

Architecture services, oil and gas see sharpest decline in future investment level

Industrial machinery leads the way for AI-enabled sustainability efforts

“AI has more elements that can be used to judge whether or not something can actually be applied, rather than just conceptual presentations.”

Yamaha EV: Using generative AI to design a unique prototype

Solution spotlight

Life sciences sees possibility amid disruption

“Certainly, there are AI tools that help with creativity, but I don’t think AI will ever take over an engineer or a scientist or a designer’s job. I think AI will be a fantastic assistant and boost efficiency and productivity.”

Industrial machinery sees dramatic jump in skills shortage

“As with the construction industry, as a whole, there is a shortage of skilled workers, and in Japan, the issue of how to respond to the Work Style Reform is a challenge. But as a means of solving this, we are introducing new technology to improve productivity.”

Revolution Workshop: Offering training and support

Solution spotlight

Media and entertainment is experiencing the most AI disruption and the most benefit

“We're advancing rapidly with AI, achieving significant milestones in our business. For instance, we've developed an AI-based, real-time cloth simulation for our customers in gaming, media and entertainment.”

“We're advancing rapidly with AI, achieving significant milestones in our business. For instance, we've developed an AI-based, real-time cloth simulation for our customers in gaming, media and entertainment.”

“We're advancing rapidly with AI, achieving significant milestones in our business. For instance, we've developed an AI-based, real-time cloth simulation for our customers in gaming, media and entertainment.”

Untold Studios: integrating emerging technology

Solution spotlight

Games sector sees the biggest challenges with finding skilled talent

Share this insight

Explore the report

Digital transformation efforts have an overwhelmingly positive impact

Sustainability transitions from pressure to profitability

AI solidifies its place as the top sustainability enabler

The AI hype cycle meets reality

Cost, tech, and talent are top concerns

Leaders are more cautious in the near term

The search for talent intensifies, with focus on AI skills

Investments remain strong but reflect uncertainty

Explore all AECO, D&M, and M&E insights