Navigating 2025: Key Trends and Insights for UK Architecture, Engineering & Consulting Firms

Every year, Deltek conducts a survey of architecture, engineering and consulting firms with 200 senior decision-makers taking part in January this year. The survey reviews the past year and identifies the biggest challenges and opportunities firms will face in the near future.

The key findings make up the 6th Annual Deltek Clarity UK Industry Study. Inside, you'll find valuable perspectives from your peers into how they expect economic, market, technology and workforce trends to develop over the course of 2025 and beyond.

Read on to discover the highlights from this year's survey.

UK Firms are Approaching the Year with Cautious Optimism

While the UK economy is still facing uncertainty, positivity around profits indicates a cautiously optimistic outlook for 2025. In fact, nearly a third of firms expect profits to increase by more than 10% over the next year. However, 35% of firms still see economic conditions and market trends as the most likely external factors to impact profitability ahead of regulatory changes, compliance costs and changes in client expectations and needs.

Technology will remain hugely important, with 36% of firms viewing technology and automation as the most likely single driver of profitability. This is higher than both expansion into new markets or services (25%) and increased client demand for services (24%).

Firms are cautiously optimistic about growth and profitability in 2025

Profit Margins Look to be Improving

The profitability trend looks positive for architecture, engineering and consultancy firms. Sixty per cent estimate that their gross profit margin increased last year, and 83 per cent expect it to increase further in 2025.

On average, the estimated gross profit margin for these UK firms is 24% but varies by industry sector; consulting (29%) and engineering firms (25%) estimate a higher average margin than architecture firms (18%).

AI Remains a Hot Topic in 2025

As AI matures, firms look to embrace its benefits. These could include expanding the services they offer, improving employee job satisfaction, gaining a significant competitive advantage and increasing efficiency.

In fact, 82% of firms believe that the successful implementation of AI will have a significant impact on increasing profits. And that's not all. 52% of firms expect improved operational efficiency with AI and 50% think they'll see improved project timelines and delivery.

However, firms are also conscious about the potential impact AI could have on their recruitment practices, with 81% concerned it will lead to fewer hirings and 79% worried about potential redundancies for existing staff.

Beyond workforce concerns, 80% of UK firms also feel it's important to consider potential threats, risks and ethical issues before implementing AI.

Over a third of firms see technology and automation as a driver of profitability

New Technology Must be Implemented Effectively and Safely

Digital transformation remains important for UK organizations in 2025, with 39% most likely to prioritize investment in technology innovation, such as AI, and 37% prioritizing the effective implementation of these technology investments.

However, improving Cybersecurity is also one of UK firms' top priorities this year, with 36% of organizations considering it a priority compared to 23% in 2024. Just over a third of UK firms experienced a Cybersecurity attack in the past 18 months, so it's little wonder that Cybersecurity risks and breaches are among the most commonly perceived threats to organizations in 2025, with 36% of firms feeling extremely concerned about them.

Many UK firms seek to mitigate this risk by investing more in Cybersecurity. In fact, 79% of firms plan to increase their investment this year, with 38% of those firms planning to invest 'significantly more' during 2025.

Firms Plan to Grow Workforce Size and Skill

Over three-quarters (78%) of UK firms plan to increase the size of their workforce in 2025—up from 58% in 2024.

Unfortunately, employee-related issues still remain and could be detrimental to UK organizations. Roughly half of firms expect to experience difficulty attracting and retaining talent (47%) and see a lack of investment in training and upskilling staff (48%) as negatively affecting recruitment and retention.

To combat this, organizations are looking at progressive ways to attract and empower young employees. This includes promoting a workplace culture of collaboration and innovation (51%), encouraging continuous learning through workshops, certifications and training (49%), fostering work-life balance and offering mental health support (48%).

A high percentage of firms are planning to increase the size of their workforce in 2025

Enabling Efficient Project Delivery is Still a Focus

When it comes to successful project delivery, technology integration and data management issues are the primary challenges for over half of UK professional services firms, with this concern rising to two-thirds among engineering firms. Resource shortages are another significant issue, affecting 46% of firms. Regulatory and compliance issues and changes in client requirements are also major hurdles, each impacting around 45% of firms. Project delays and budget overruns are challenges for approximately two-fifths of firms.

Confidence in reporting key project performance metrics, such as budget, project profitability, actual cost and schedule, continues to rise. Around three-quarters of UK firms are now confident in tracking these metrics, reflecting a steady improvement from previous years. Of the firms surveyed, 76% monitor client satisfaction, an increase from 63% in 2024. 74% of firms track on-time delivery, while 72% and 71% of firms monitor profitability and cost variance, respectively. 71% of firms track the effective billing rate, up from 53% in the previous year.

Prepare your Organization to Take on the Year with Confidence

These are just five of the key trends from the 6th Annual Deltek Clarity UK Industry Study.

Read the full report to take a closer look at these trends and discover deep insight into the challenges and opportunities currently facing your industry today.