2023-26 SLED AEC Market Forecast

Published: October 31, 2023

Community DevelopmentEconomic Development/RegulationEducation (Higher)Education (Primary/Secondary)General Government ServicesHealth CareJustice/Public Safety & Homeland SecurityNatural Resources/EnvironmentPublic FinancePublic UtilitiesSocial ServicesTransportation

The market has finally incorporated the full annual impact of stimulus starting in 2023, which makes possible a compound annual growth rate (CAGR) of 4.4% across the five-year forecast period from 2021-2026. This improves upon the 3.6% historical rate from 1997-2022. The boost in demand due mainly to federal Infrastructure Investment and Jobs Act (IIJA) stimulus should provide stability to help offset possible economic weakness moving forward for 2024-26.

The state, local, and education (SLED) architecture, engineering, and construction (AEC) market was able to quickly recover from the dip in spending during the pandemic induced recession of 2020-2021 thanks to Cares Act and American Rescue Plan Act (ARPA) federal stimulus. 

The impact of the stimulus provided by the Infrastructure Investment and Jobs Act (IIJA) did not fully materialize until 2023, resulting in the second largest one-year increase in demand recorded since 1997. We are expecting this scenario of elevated demand to continue through the forecast period to 2026. It will help provide stability for governments as well as for the contractors, professional services firms and material suppliers who depend on this important source of leads and new business.  

Starting this edition, we provide additional views or breakouts of each of the major Census structure types using GovWin’s proprietary database of bids, RFPs and contract awards. We did not feature all of the very niche sub-categories seen in the detailed Census tables but focused instead on highlighting the most important ones and provided additional value through these new profiles using our data.      

This report will help contractors understand market trends across 11 major Census categories, many sub-categories, 12 different Deltek market verticals, 8 different Deltek levels of government, all 50 states and DC, and four different types of projects (build, design/build, design-only and renovation). Census categories include amusement and recreation, commercial, educational, healthcare, highway and street, office, power, public safety, residential, transportation (air/sea/land) and water/sewage/waste disposal. In addition, we profile the non-Census category of “trail and path.”

The spending impacts of the governors' agendas, ARPA, and IIJA will also be reviewed.

Introduction (slides 6-17)

*Report Purpose
*Market Definition
*Scope and Methodology
*Data Sources

Market Forecast (slides 19-107)

*Economic Outlook
*Market Volatility
*Historical Growth
*Total Addressable Market
*Bid Forecasts
*ARPA & IIJA
*Governors’ Agendas
*Forecasts and profiles of major Census categories, including breakouts by sub-category, vertical, level of government, location of project (state) and type of project (build, design/build, design-only and renovate)

Appendix (slides 109-115)

*Terms & Definitions