Architectural Services Market Size, Share & Trends Analysis Report By Service Type (Architectural Advisory Services, Engineering Services, Construction and Project Management Services, Interior Design Services, Urban Planning Services, Others), By End-User (Education, Government, Healthcare, Hospitality, Residential, Industrial, Retail, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global architectural services market size was valued at USD 384.03 billion in 2022. It is estimated to reach USD 585.57 billion by 2031, growing at a CAGR of 4.8% during the forecast period (2023–2031).

Architectural services include the planning and creating of building and interior aesthetics that adhere to zoning, legislation, and safety standards. These services include programming, interior design, feasibility analyses, site selection, project management, property condition audits, renderings, marketing materials, permanent site presence, and multiple contract processing. Engineering services, architectural services, surveying and mapping services, geophysical services, laboratory testing services, building inspection services, and drawing services are the main categories of architectural and engineering consultants and related services. Engineering services are those offered for system, assembly, or product deployments comparable to those indicated for this program in terms of their material, design, and scope. It is employed in various applications, including pipeline, pipeline, port, airport, road, and rail.

Highlights

• Construction and project management services dominate the service type segment
• Industrialdominates the end-user segment
• Asia-Pacificis the highest shareholder in the global market

Market Dynamics

Global Architectural Services Market Drivers:

Increasing Adoption of 3D Printing and 5D Building Information Modeling

3D printing technology is gradually growing in the architectural services market. 3D printing can help architects create different models of the proposed infrastructure while achieving up to 75% of cost savings and reducing the turnaround time from multiple days to a few hours. Besides saving time and money, the 3D printing technology can also be integrated seamlessly with the in-house CAD applications to add newer design possibilities and better perspectives with visually appealing scaled models. Further, the Office of the Future in Dubai can be considered the world's first 3D-printed office.

Technological advances coupled with innovation and sustainability are anticipated to emerge as the key growth drivers for the architectural services market. 5D Building Information Modelling (BIM) is the latest innovation that architectural firms leverage to deliver cost-effective architectural services. In addition, 5D BIM offers features such as efficient planning of cost schedules and real-time cost estimations for a quick comparison with the target cost. It thereby aids in calculating the overall costs sustained during each stage of construction. Adopting novel solutions and cutting-edge technologies will fuel market expansion over the forecast period.

Substantial Increase in Demand for Design and Drafting Services

As the level of building design continues to advance in line with the strengthening regulations and favorable policies, construction companies are expected to opt for architectural services to ensure high technical design development and accurate drafting services. This would further trigger the demand for contractual service offerings to address the complicated mechanical and electrical requirements and would subsequently open opportunities for providers of high-level pre-design analysis services. At this juncture, architectural service companies are enhancing their service offerings with those of diversified architectural companies to address structural challenges. In addition, the growing popularity of CAD services such as 2D and 3D CAD drafting, paper to CAD, and others among architects, engineers, and construction firms is one major factor driving the market growth. Construction across verticals such as government, industrial, and residential is also expected to play a decisive role in driving the demand for architectural services.

Global Architectural Services Market Restraint:

Higher Cost for Designing and Planning

Dealing with budget-conscious customers is turning out to be one of the significant challenges for architectural firms. The prices architectural firms quote for designing and planning a project are mainly decided based on the project requirements, the project's location, and the project's size and can differ from project to project. Prices also tend to vary depending on the architectural firm's expertise. As a result, it is uncommon for two separate architectural firms to quote the same pricing. In addition, typical phases of an architectural project include schematic designing, design development, construction documentation, bidding and negotiation, and construction administration. The longer the design process, the more the costs incurred. Architectural service providers would find it challenging to provide cost-effective services while quoting competitive prices, restraining the market growth.

Global Architectural Services Market Opportunities:

Growth in Construction Activities

The growth of the real estate market is also expected to contribute significantly to the development of the architectural services market. While emerging markets in Asia are anticipated to emerge as the fastest-growing regional markets, urbanization will no longer be limited to emerging markets. The cities in developed economies are becoming smarter owing to the rising technological adoption and growing rapidly. In addition, the continued urbanization and the growing population would subsequently drive the construction market's growth. The U.S. Department of Labor Statistics predicted that jobs in construction and extraction will increase by 10% between 2018 and 2028 due to ongoing economic expansion and population growth, which will need the construction of more homes, roads, and other infrastructure.

Furthermore, the construction of public infrastructure, residential housing, and commercial buildings are all predicted to experience significant expansion. Moreover, initiatives being undertaken to develop infrastructure by governments in emerging economies also bode well for the construction industry and the overall economic growth of these economies. As construction activities continue to rise, construction companies increasingly opt for architectural services to streamline their construction projects, creating tremendous opportunities for the market players to grow.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global architectural services market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific is the most significant shareholder in the global architectural services market and is anticipated to grow at a CAGR of 5.2% during the forecast period. According to Forbes, the Asia-Pacific region has experienced tremendous market expansion due to the region's significant real estate industry penetration and government emphasis on smart cities. A growing number of new funds are taking an interest in Asia-Pacific assets, which indicates that prices are still at reasonable levels and that the region's markets continue to offer a variety of investment opportunities, according to Mondaq. This growth in interest is coming from both domestic and international institutional investors. In addition, the presence of countries such as India and China is fueling the market growth. IBEF (India Brand Equity Foundation) predicts that India's real estate market will grow from 120 billion USD in 2017 to 1 trillion USD by 2030 and contribute up to 13% of GDP by 2025. The sectors of retail, hospitality, and commercial real estate sectors are also expanding rapidly and helping to meet India's growing infrastructure needs. The country's need for architectural services will increase as a result and result in an expansion of the market.

Furthermore, foreign architects have arrived in the middle kingdom/country as urbanization in China continues to advance quickly. The construction has significantly slowed as the western world continues recovering from a slump in real estate prices. China has turned out to be a pleasant opportunity for many foreign architects. In addition, foreign architects are well-known for their excellence, originality, and utilization of green technology. The Chinese government is actively looking into methods to shift toward a growth model that is more environmentally friendly as the country struggles with pollution.

Europe is projected to grow at a CAGR of 2.8% over the forecast period. Europe contributed a sizeable portion of the market's revenue. Due to increased investments and new infrastructure development projects, the IT sector's booming construction sector can be credited with this market's expansion. In addition, the COVID-19 pandemic-related temporary halt of the construction of several data center facilities and the launch of new IT projects are anticipated to impact the architectural service industry throughout the forecast period.

North America is growing substantially in the market and is anticipated to participate vigorously during the forecast period. The highest demand for architectural services in this area has been caused by infrastructure modernization and redevelopment. The foundation of this particular market segment has been rapid digitalization with the aid of end-to-end software and the most up-to-date designing tools.

The Middle Eastern and African region is expected to showcase the highest growth potential in the architectural services market owing to the increasing number of multi-billion construction projects, which are expected to become operational in phases over the forecast period. Regional market expansion is expected to multiply with rising private company investments in these developments.

Segmental Analysis

The global architectural services market is segmented by service type and end-user.

Based on service type, the global architectural services market is divided into architectural advisory services, engineering services, construction and project management services, interior design services, urban planning services, and others. 

The construction and project management services segment is responsible for the largest market share and is estimated to grow at a CAGR of 4.21% over the forecast period. Construction and project management services include contract management and negotiations, construction designing, cost estimation and evaluation, staff training and development, project control, and construction design review. The project management service includes project programming, design management, quality management, time and cost control service, risk analysis, and similar project-related services. The segmental growth can be attributed to increasing construction activities in developing countries such as China, India, and Indonesia.

Urban planning services include landscape designing, water and waste management, sewage management, urban designing, research and analysis, strategy formulation for plan execution, public consultations, and policy recommendation. Urban planning is the fastest-emerging service in the market. The segment's expansion can be ascribed to two factors: the development of the urban population and the introduction of smart city initiatives by governments in developing nations. For instance, the Indian government approved a smart city project which shall benefit 99 cities in India.

Similar smart city projects across significant countries have stimulated the construction market, subsequently helping the growth of the architectural services market. Some of the most important construction projects across the world contributing to better urbanization include Al Maktoum International Airport, Dubai; Jubail II, Saudi Arabia; Dubailand, Dubai; South-North Water Transfer Project, China; High-Speed Railway, California; Chuo Shinkansen, Japan; and Great Man-Made River Project, Libya. Thus, the demand for urban planning is anticipated to grow exponentially in the country.

Based on end-user, the global architectural services market is segmented into education, government, healthcare, hospitality, residential, industrial, retail, and others.

The industrial segment owns the highest market share and is estimated to expand at a CAGR of 3.8% during the forecast period. Industrial users avail architectural services for planning and designing their companies, corporate offices, buildings, corporate campuses, manufacturing plants, warehouses, and other structures. The industrial sector dominated the market. This growth can be linked to global industrialization that is happening quickly, as well as an increase in firm business acquisitions and new factory construction. Furthermore, the need for architectural consultancy and interior design services is anticipated to increase due to rising environmental concerns and business owners' ambitions to establish green buildings.

The residential sector is the largest end-user of architectural services. Significant applications of architectural services in the residential sector include houses, bungalows, and apartments. A rise in disposable income and declining home financing rates in emerging nations are expected to impact market expansion. Likewise, growing urbanization in tier-II cities in emerging countries is predicted to significantly drive the demand for architectural services throughout the projection period. In addition, to better manage their smart city projects, architects are predicted to want more services, including urban planning and project management.

Recent Developments

• January 2023- PCL Construction was granted the Engineering, Procurement and Construction (EPC) contract for building the 400 MW Stubbo Solar project by the renewable energy business ACEN Australia (PCL). PCL is responsible for the detailed design, engineering, and procurement of Stubbo Solar and has been hired to execute all parts of the solar project.

• July 2022- Arcadis and IBI Group Inc. announced that they had agreed for Arcadis to buy all outstanding shares of IBI Group for C$19.50 per share. The acquisition of IBI Group's forward-thinking, technology-driven design business would bolster Arcadis' digital leadership, enhance its North American presence, and propel the global expansion of its combined solutions.