SLED Architecture, Engineering, & Construction (AEC) Market, FY 2021-2024

Published: August 17, 2021

FeaturedSLED Market AnalysisArchitecture, Engineering, and Construction (AEC)Forecasts and Spending

State, local, and education (SLED) demand for architecture, engineering, and construction (AEC) services will grow from $313.7 billion in FY 2021 to $333.8 billion in FY 2024 at a compound annual growth rate (CAGR) of 1.3%.

The SLED AEC market reached an all-time high in spending of $331.1 billion in FY 2020, followed by a sharp drop to $305.7 billion in FY 2021.  Projects that were green-lit and funded prior to the outbreak of the pandemic continued as planned.  Then pandemic-related disruptions to government business processes and steep revenue declines served to drag down AEC spending going into 2021.  However, the market is expected to rebound at least at the rate of the 2011-2021 CAGR through 2024, taking spending to a new peak of $333.8 billion.

NOTE: Currently, the prospects for passage of federal infrastructure spending along the lines of the U.S. Senate's bipartisan framework remain too tenuous to incorporate that spending into this forecast.  If that legislation passes, it would likely push the market to a new high in FY 2023, possibly above $340 billion.

In lieu of major new federal spending, the SLED AEC market will be driven by immediate post-pandemic concerns, including 1) reinvigorating mass transit systems and 2) adapting higher education to a blended on-campus and remote environment.  Other major drivers will originate from the governors' post-pandemic agendas, including a major surge in interest in 1) closing the broadband gap, 2) roads and bridges, and 3) generalized infrastructure needs.

Currently, most states and localities are using the first half of the American Rescue Plan Act (ARPA) stimulus funds to backfill their general fund budgets and eliminate cuts from the pandemic economic lockdowns.  The next tranche of funding becomes available in March, 2021, and should lead to funding of more new projects, assuming that revenue streams return to pre-pandemic levels as expected.

This Deltek forecast details SLED AEC spending across 60 sub-categories, organized under the following major headers: Residential, Office, Commercial, Health Care, Education, Amusement & Recreation, Transportation, Power, Highway & Street, Sewage & Waste Disposal, Water Supply, and Conservation & Development.

Introduction (slides 5-14)

  • Report Purpose
  • Market Definition
  • Scope and Methodology
  • Data Sources
  • Fiscal Years

Market Forecast (slides 15-36)

  • Economic Outlook
  • Market Volatility
  • Reconciliation
  • Historical Growth
  • Total Addressable Market
  • Forecast Findings
  • Market Segments
  • Market Verticals

Market Verticals (slides 37-59)

  • Community Development
  • Education (Higher)
  • Education (K-12)
  • General Government
  • Health Care
  • Justice & Public Safety
  • Natural Resources/Environment
  • Public Finance
  • Public Utilities
  • Transportation

Appendix (slides 61-69)

  • Terms & Definitions