What is the AEC Industry: Understanding the Dynamic Architecture, Engineering, and Construction Industry

The Architecture, Engineering, and Construction (AEC) industry, commonly referred to as the AEC industry, is the backbone of our built environment. But what is AEC and what makes this industry so important in 2024? In this blog, we’ll dive into the components of the AEC industry and the forces shaping this critical part of our economy.

What Does AEC Stand For?

The acronym AEC stands for Architecture, Engineering, and Construction—the pillars that collectively shape our built environment.

• Architecture sets the vision, creating designs that balance aesthetics and functionality. Architects conceptualize structures, providing the blueprint for what will be built.
• Engineering takes these designs and ensures their safety and feasibility. Engineers bring the vision to life, addressing structural integrity and technical aspects crucial for execution.
• Construction is the realization of these plans. Construction professionals, armed with the architectural vision and engineering blueprints, execute the physical creation of structures.

AEC is a collaborative effort where Architects design, Engineers refine, and Construction transforms ideas into tangible structures. This industry is responsible for creating and maintaining our country’s critical infrastructure—from buildings to roads.

What Are the Top AEC Industry Trends Right Now?

The AEC industry is currently being shaped by numerous trends and priorities:

1. Sustainability

Sustainability is increasingly important to AEC projects. Beyond incorporating green designs, the industry is embracing renewable energy sources, eco-friendly materials, and efficient waste management practices.

Developing net zero buildings and infrastructure is extremely important, but also a complex challenge. And this isn’t a nice-to-have, it’s imperative: it’s anticipated that 33% of buildings will have reached the end of their life by 2040 and that construction produces 100 billion tons of waste every year.

2. Mega Projects

The AEC sector is witnessing a surge in construction mega projects, characterized by their size and complexity. From iconic skyscrapers to large-scale infrastructure developments (driven by the Infrastructure, Investment, and Jobs Act), these projects redefine the scope and scale of what the industry can achieve.

3. Supply Chain Disruption and Inflation

The industry is grappling with unprecedented challenges, including disruptions in the supply chain and inflationary pressures. These factors impact project timelines and budgets, necessitating adaptive strategies and innovative approaches to sourcing materials and managing costs effectively.

Due to high inflation rates, construction starts have been sluggish to kick off 2024. But if interest rate cuts do come near the second half of the year, economists are hopeful that things will start to pick up.

4. Skilled Labor Shortage

The AEC market is undergoing robust growth. The market size is expected to nearly double from $8.9 billion in 2022 to $16.5 billion in 2030. And with that growth comes the demand for more skilled workers.

To make matters worse, 55% of architects and engineers say the Great Resignation still pervades the industry, citing high burnout, few advancement opportunities, and a lack of flexibility as reasons driving high employee turnover.

Firms are engaged in fierce competition to secure top talent, emphasizing the need for comprehensive training programs, strategic recruitment initiatives, and enticing retention strategies to maintain a competitive edge.

5. Digital Transformation

A wave of digital transformation is sweeping across AEC, revolutionizing traditional practices. Artificial Intelligence (AI) is being integrated into various facets, from advanced simulations optimizing designs to smart construction technologies streamlining project execution. This digital shift enhances efficiency, accuracy, and overall project outcomes.

Understanding AEC Subindustries

To further understand what the AEC industry is, we must discuss the sub-industries that make up AEC in detail.

Architecture

Challenges: Architects face the challenge of balancing artistic expression with practicality and changing trends. Striving to create aesthetically pleasing designs within budget constraints and regulatory frameworks is an ongoing struggle. Staying abreast of technological advancements in design software and incorporating sustainable practices further adds to the complexity.

Goals: Architectural firms aspire to create iconic structures that reflect innovation and respond to evolving societal needs. Incorporating sustainable and eco-friendly elements is a recurring goal, aligning designs with environmental responsibility.

Needs: Architects require access to cutting-edge design tools, continuous learning opportunities, and collaborative platforms. Architects must complete annual continuing education to maintain various AEC certifications and their licenses. Having access to high-quality and cutting-edge training is essential to these professionals.

Engineering

Challenges: With the advent of artificial intelligence (AI), engineers are dealing with the implications of a rapidly changing technological landscape. Meeting safety standards, overcoming logistical hurdles, and optimizing project efficiency are also constant challenges. A shortage of skilled engineers amplifies these concerns. With the Infrastructure, Investment, and Jobs Act (IIJA) estimated to create over 82,000 engineering jobs, this will continue to be a challenge.

Goals: Engineering projects require precision, efficiency, and sustainable approaches. Engineers seek to implement state-of-the-art technologies and streamlined processes while adhering to stringent safety and ethical standards. Collaborating seamlessly with architects and construction professionals is pivotal for goal attainment.

Needs: Access to advanced engineering software, training on emerging technologies like AI, and a continuous influx of skilled professionals are pressing needs. Like architects, engineers must complete continuing education hours to maintain their professional license, making training essential.

Construction

Challenges: Construction companies grapple with resource management, project delays, and safety concerns. Balancing tight budgets, coping with labor shortages, and navigating regulatory compliance add additional layers of complexity.

Goals: The construction sector aims for timely project completion within budgetary constraints. Embracing sustainable building practices, ensuring workplace safety, and adopting innovative construction methodologies are additional overarching goals.

Needs: Efficient project management tools, robust safety and OSHA 10 construction training, and strategies to address the skilled labor shortage are critical needs. Access to funding, collaboration with architects and engineers, and the integration of sustainable practices are also paramount.

Resources to Help AEC Firms Thrive

To help AEC firms thrive in the year ahead, we’ve created numerous resources to help with some of the top challenges:

• Guide to Onboarding AEC Industry Employees. If you’re worried about how you’re going to train a surge of new hires or ensure higher long-term retention rates, it’s important to solidify your onboarding strategy. This free AEC onboarding guide outlines how to do exactly that.
• Learning Paths for AEC Professionals. Whether you want to onboard, cross-train, or just provide regular training and development for your workers, learning paths make it faster and easier to assign a meaningful curriculum of eLearning. We have free learning paths for:
  • Architects, Designers, and Engineers
  • Construction Project Managers
  • 9 Key Construction Roles
• State of AEC Training. We created a free guide that outlines the state of workforce training for architects, engineers, and construction personnel. Download this guide to learn how you can tailor your training approach accordingly.

AEC Industry Success Stories: Embracing Automated Reporting and Online Training

Implementing the right AEC industrial solutions can have a massive impact on your business. By solving the top challenges your firm faces and streamlining daily tasks, you can improve productivity and, more importantly, save money.

Learn how Vector Solutions customers have achieved big successes with solutions tailor-made for the AEC industry.

Scaling AEC Workforce Training

EMJ Construction knew they needed to improve the training resources they offered their employees. With dispersed and remote employees at all levels (from entry-level to industry veterans), they needed a training program that could fulfill a variety of needs.

By using our Learning Management System (LMS) and online AEC courses, they were able to easily meet continuing education requirements, manage credentials and licenses, keep track of expiration dates, and so much more.

The impact?

• Easy access to training for all employees, regardless of their work location.
• Comprehensive training in all the soft and technical skills required in construction.
• Streamlined license management.
• Closed skills gaps through easier upskilling and onboarding training.

Improving Construction Project Management

CHA Consulting, Inc. understood the importance of strong project management for a growing and diversified company and set out to create its own in-house project management certification.

CHA combined Vector Solutions project management courses with its own courses to create a customized ‘CHA Way’ Project Management Program. CHA uses a variety of Vector Solutions’ products, including:

• Learning Management System (LMS)
• AEC Complete Course Library
• Design and Construction-Specific Project Management Courses with Coverage of Schedules, Finance, Quality Control, and More
• Courses to support Project Management Institute’s (PMI) Project Management Professional PMI-PMP® Continuing Education PDH requirements
• PMBOK Guide Courses
• Best Practices and Emerging Technologies
• Agile Methodology