5 Trends That Will Shape AEC in 2025
Will 2025 be the first true post-pandemic year for the AEC sector?
After a challenging 2024, marked by the winding down of government stimulus packages, a shift toward austerity in several key economies, stubbornly high energy, materials and labor costs, and constrained money supply due to high interest rates, 2025 could mark a rebound.
More importantly, 2025 should set the stage for trends that will shape the next decade. Digital infrastructure, high-tech manufacturing and energy transition projects will drive activity; technology adoption will accelerate across the value chain, bringing greater clarity to the role and value of AI; Lastly, workforce challenges and skill shortages will exacerbate, bringing an advantage to firms that have optimized labor-intensive processes and built a stronger talent pipeline.
1. Sustainability Drives Push to Retrofit and Renovate
Could 2025 be the year of the “second-hand principle”? It should, at least, be marked by growing demand for retrofitting (ie, upgrading or adding equipment to a building after it is finished), redevelopment and conversion.
This trend will be underpinned by several legislative, demographic and economic trends, most notably the push for sustainability and net-zero.
EU Regulations like the Corporate Sustainability Reporting Directive (CSRD), whose expanded scope takes effect on January 1, will keep pushing companies to adopt strategies to make buildings more energy-efficient and reduce energy demand.
A crucial challenge for large companies, in that regard, will be to gather standardized, traceable energy consumption information across a large number of sites and properties, to meet third-party auditing requirements. Technologies that can federate IoT and third-party systems, such as digital twins or Enterprise Asset Management (EAM) platforms, should therefore gain traction.
More broadly, policy frameworks like the European Green Deal, are accelerating the shift toward net-zero energy buildings by 2050. They will drive a change in approach, with sustainability informing every phase of the AEC value chain, from initial design to renovation, maintenance and eventual decommissioning.
Net-zero objectives should also bring a number of new projects to abate emissions, for example by retrofitting power and industrial plants with carbon capture, utilization, and storage (CCUS). The UK, for example, has recently announced a £22 billion investment in carbon capture and storage projects in Merseyside and Teesside.
Companies that don’t follow this path and make it part of every new project could increasingly be left with stranded assets - buildings that are not energy-efficient enough to meet regulations but where upgrades would be too costly to make economic sense. The problem could particularly affect the third of all industrial and retail buildings that have an energy performance rating of D and below.
2. MEA and Mega-projects Underpin Growth
The ability of EMIA’s AEC firms to grow and find margins will also increasingly depend on large, multi-disciplinary and privately funded projects, often outside of Europe.
With the Eurozone’s largest economies all engaged in reduction in public expenses and fiscal consolidation policies, European firms could experience a triple whammy: higher taxes and labor costs, cuts in subsidies and stimulus packages that undermine domestic demand and greater uncertainty in public projects. By contrast, Middle-East, India and Africa should see a 4% growth in construction spending, driven by a combination of large energy and infrastructure projects.
In every geography, digital infrastructure projects, such as data centers, as well as semiconductor fabs should also represent significant opportunities, supported by such policies as the CHIPS Act in the United States and the European Chips Act in the EU. Other sectors with strategic geopolitical importance are also likely to benefit from the trend toward reshoring production and establishing regional manufacturing hubs in response to tariffs and international tensions.
From a digital technology perspective, these mega-projects will have several implications. Collaboration and workflow automation will become priorities, with 51% of firms reporting the use of file-sharing sites for partner collaboration and 36% using online project collaboration software. Common data standards, such as CFIHOS or ISO 19650, should increasingly be used to organize collaboration between large numbers of stakeholders.
The high level of uncertainty and construction risk will also make it paramount to select projects wisely, optimize resources and avoid bottlenecks - for example through approaches like Enterprise Project Performance.
3. BIM becomes Mandatory, Digital Twins Gain Traction
Another consequence of the growing importance of large projects is the need, for structures of all sizes, to adopt tools and methods that integrate with digital backbones, such as digital twins and BIM.
BIM will continue its rapid advance as the industry’s standard. According to the AIA Firm Survey Report 2024, BIM is now a standard practice for 95% of large firms and 88% of mid-size firms. Adoption by smaller firms is also becoming the norm rather than the exception.
Governments are also accelerating adoption. We could see more governments mandate the use of BIM for large public projects, following the early example of the UK and, more recently, Spain and Ireland. In 2025, AEC firms will also focus on leveraging BIM for advanced capabilities, such as task automation, elimination of bottlenecks, workflow optimization and error minimization - for example, clash detection - to avoid rework.
If BIM is the standard to offer a static representation of the build environment, AEC firms are still lagging behind every other industry in the adoption of digital twins, according to Hexagon’s digital twin report: Only 25% of AEC reach the report’s technical maturity threshold, compared to 40% in oil and gas or 53% in chemicals. The gap could lead to an increasing tension, with owner operators selecting AEC firms on their ability to integrate their design, engineering and construction processes within a prescribed project twin platform.
4. AI Finds Its Footing
Predictions of an AI bubble bursting in 2025 are in fashion. However, it’s more likely that this will be the year the industry distinguishes between transformative applications and those that are anecdotal or unproductive.
Among the most productive uses are the indexation, contextualization, organization and interrogation of the vast amounts of documents and unstructured information AEC firms rely on.
Other mature applications of machine learning—such as predictive maintenance for construction equipment or computer vision—are expected to continue gaining traction in 2025, as companies prioritize proven ROI over exploratory pilots.
Generative AI, meanwhile, may face a reckoning. Consumer GenAI tools are increasingly viewed with skepticism, with one in two AEC executives expressing concerns about regulation. This shift is likely to pave the way for privately trained models tailored to industry-specific needs that emphasize reliability, security and compliance.
Among AEC verticals, construction firms appear the most enthusiastic about AI’s potential, with their professionals being twice as likely as those in architecture and engineering to view it as a tool for improving operational efficiencies and accelerating project delivery.
5. Generational Shifts Drive Changes in Practices
The construction sector’s bullish outlook on AI likely reflects a more urgent need to optimize processes and increase labor productivity amid demographic challenges, such as a rapidly aging workforce and a shortage of new entrants.
In the EU alone, the sector will need an estimated 4.1 million workers to replace those expected to leave, primarily due to retirement. These challenges are compounded by the perception of construction as an unattractive career path. Physically demanding roles, job instability and a lack of clear career progression deter younger generations from entering the industry.
The result is a rapid aging of the workforce. In Europe, one in three construction workers is already over 50, and the physically demanding nature of their work makes it less likely for workers to remain in the industry past the legal retirement age. The trend applies globally, with the median age of construction workers standing from 42 in the United States to 51 in South Korea.
These challenges are not unique to construction: They extend across the AEC value chain and reflect global trends. Europe’s population, for example, reached its demographic tipping point in 2024 and started shrinking for the first time in a period of peace.
In 2025 and beyond, this trend will result in a shrinking talent pool and intensified competition for specialized trades. In sectors like oil and gas and nuclear, construction worker shortages are already impacting project timelines.
How can AEC firms react? First, we expect large companies to ramp up training initiatives in areas of skill shortages, following examples like EDF’s training 8,000 people for welding, mechanical, electrical and construction for its Hinkley Point C nuclear plant project.
Companies of all sizes will also need to focus on eliminating wasteful manual practices such as paper logs, maximizing time-on-tools and prioritizing digitization and automation. Structured methodologies like Advanced Work Packaging (AWP), which streamline workflows from planning to turnover, are expected to gain traction.
These signals indicate a broader trend: in the coming decade, digital transformation will be strongly motivated by the ability to remediate skill shortages and generational shifts. Leveraging technology to reduce labor intensity and prioritizing the training and retention of skilled workers will be central to project success, revenue growth and profitability —in 2025 and beyond.