How A&E Firms Can Thrive in a Shifting Market

Uncertainty in funding for state and local (SLED) projects is impacting the entire architecture and engineering (A&E) industry—increasing competition for non-SLED work and adding pressure to secure alternative projects. Additionally, rising and unpredictable costs driven by anticipated tariffs may lead to project delays industry wide.

Now more than ever, A&E firms should consider diversifying their portfolios to align their services with government priorities to unlock new sources of growth. As federal and SLED governments invest in energy-efficient buildings, critical infrastructure, community support facilities and plans for AI adoption, firms that position themselves strategically can take full advantage of this momentum. Below are four major trends shaping public investment and how firms can capitalize on them to expand their impact and relevance.

Energy Efficiency: Leading the Shift Toward Sustainability

A major trend shaping the market is an increased investment in energy efficiency. Public-sector clients are prioritizing upgrades to cut energy use, integrate renewable energy and boost sustainability. A&E firms can take advantage of this by demonstrating their capabilities in designing high-performance, energy-efficient buildings and incorporating solar, geothermal and other clean technologies into their projects.

In addition to design services, many firms offer energy consulting and planning support to government clients looking to optimize energy use and meet carbon-reduction targets. The latest Deltek Clarity A&E Industry Study reveals that A&E firms are optimistic about growth particularly within energy, infrastructure, transportation and environmental services. Notably, the energy/power sector is identified as the top growth market, with 57% of firms anticipating an increased presence within the next 18 months. Firms that align their proposals with funding programs and emerging regulatory requirements will be better positioned to secure new opportunities.

Deltek customer CBBEL, a full-service consulting engineering and surveying firm, works with green energy companies to evaluate sites for potential renewable energy projects, including solar and wind. In addition, CBBEL is actively installing electric vehicle charging stations across Chicago. The firm understands that easy access to EV charging stations promotes green infrastructure, reduces carbon footprints and encourages travel by electric vehicle. They’ve even installed EV stations in the parking lot at their Rosemont, Illinois, headquarters.

Infrastructure Renewal: Modernizing Critical Public Systems

Another key growth area is the rising demand for infrastructure renewal, particularly water systems. According to the Deltek Clarity A&E Industry Study, 54% of firms anticipate growth in the water, wastewater and stormwater sectors.

 Aging water treatment plants, sewer lines and stormwater infrastructure urgently need repair or replacement across many regions. This presents an opportunity for firms with civil, structural and environmental engineering capabilities. By pursuing contracts related to water infrastructure and expanding into adjacent sectors, such as transportation, utilities and public safety, firms can play a vital role in modernizing public infrastructure.

Effectively managing wastewater and stormwater systems is essential to all municipalities, large or small. Deltek customer, Franson Civil Engineers, works with municipalities to help construct new water utilities, rehabilitate aging infrastructure and upgrade existing systems for the betterment of the entire community. Recently, the firm assisted American Fork City in Utah to improve and update the old and out-of-date water lines in the city's historic areas to meet state and federal standards.

Community Support Facilities: Designing with Purpose and Impact

Communities are experiencing a rise in demand for social support services, driving the need for new and upgraded facilities. According to the "10 Hotspots in State and Local Government Contracting for 2025" report, there was a 20% increase in comprehensive community support services in 2024. Since the COVID-19 pandemic, rising costs of goods, services, groceries and homes have led to increased demand for social services and a need for community support.

Programs that provide housing assistance, food security and mental health services all require thoughtfully designed spaces that are inclusive, accessible and adaptable. A&E firms that understand design's technical and human aspects can make a meaningful impact here. Developing relationships with nonprofit organizations and public agencies, especially those seeking grants or public funding, can open doors to projects with a strong social purpose. Firms can demonstrate value by showing how design can improve service delivery, enhance safety and dignity, and reduce long-term operating costs for these essential facilities.

Van Meter Williams Pollock (VMWP) is a Deltek customer specializing in affordable housing, mixed-use and market-rate housing, master planning, land use and zoning standards that help communities accommodate change. VMWP takes a comprehensive and innovative design approach. The firm integrates client needs into sustainable design solutions that address climate resilience and social and economic equity to create beautiful, inspiring communities where people can thrive.

AI Is Reshaping A&E: Redefining How We Design, Build and Deliver

Artificial intelligence (AI) is rapidly transforming industries with its ability to improve efficiency, streamline operations and support more thoughtful decision-making. AI offers practical benefits for A&E firms through automating repetitive tasks, enhancing project execution and enabling more sustainable and aesthetically optimized designs through generative tools.

As AI becomes increasingly accessible, firms that adopt it early and scale their efforts strategically can position themselves as industry leaders. Embracing traditional and generative AI opens doors to innovation and long-term relevance, while those who delay risk falling behind in a quickly evolving landscape.

Positioning for Long-Term Success

A&E firms that align their expertise with these emerging priorities—energy efficiency, infrastructure renewal, community-focused development and the proliferation of AI—will be well-positioned to lead in the years ahead. By anticipating public needs and offering strategic, forward-thinking solutions, A&E firms can strengthen their market position while making a lasting contribution to the communities they serve.