The AE Industry Muscles Its Way Into 2025

The AE Industry Muscles Its Way Into 2025

Each of our three annual symposiums has its own unique dynamic and theme. The Southeast Symposium in Miami each March presents AE industry executives and investors with a first look at how the industry is performing that year. The Western States Symposium in Las Vegas in June allows decision-makers to check in on how the industry is performing mid-year and also experience global warming in real time. The upcoming Texas and the South M&A and Business Symposium provides a unique opportunity for industry executives and investors to reflect on how the industry has performed in 2024 compared to projections and provide a preview of 2025. 

We’ll be kicking things off in Houston next month with our “State of the Industry” presentation including up-to-the-minute hard data on industry financial performance (profits, utilization, revenues per employee, etc.), forecasts, financial condition (balance sheets), anticipated raises and bonuses, backlogs, and hot and cold markets for 2025.

We can get an even earlier read on how the industry is wrapping up the year and where it’s headed in 2025 from the executives and investors who will be in attendance next month in Houston. And based on what they’re telling us, all in all, 2024 is shaping up to be yet another blow-out year of growth and innovation for (most of) the industry while 2025 promises largely more of the same.

1. Who’s headed to Houston this fall? Three-quarters of the attendees are CEOs and C-suiters, 16% are M&A executives (mostly from larger firms), and the balance are industry investors. Attendance is split pretty evenly this year between firms of $100 million-plus in revenue (generally with a national or global footprint) and firms from Texas and the South with revenues of less than $100 million. About three-quarters of the firms in attendance are privately held by either their principals, employees, ESOP, or a combination thereof. About one in five are sponsored by private equity or a family office. The balance are publicly traded. 
2. Out like a lion: With the end of the year in sight, 79% of symposium attendees are confident that this year will be even better than 2023. This confirms the optimism that industry executives and investors expressed at the start of the year when some 78% of the Southeast Symposium attendees in Miami last March forecasted that 2024 would be another sizzling one. Eighteen percent of attendees expect that this year will be flat compared with last year. Just 3% are projecting a decline in performance year over year. 
3. As the world turns: Finding and retaining talent is still the number one challenge cited by attendees. But there appears to be a subtle shift going on. As the industry becomes more tech savvy and as the labor market morphs, the number of attendees citing talent-related challenges has dropped—for the first time ever—below 70%. Compare this to over three-quarters of attendees in Miami. Instead, challenges related to keeping up with demand—particularly in terms of acquisitions and technology deployment (16%) are on the rise.
4. Drive, hydrate, heal: No, not a new R.E.M. song. But the top three markets cited by attendees as providing the greatest growth opportunities for them in 2025. Twenty-seven percent of attendees see transportation as the hot sector next year. Twenty-three percent are all in on the water market for next year. Health care is seen as the hot growth market in 2025 by 11% of attendees. 
5. Continuing consolidation: Ninety percent of attendees have M&A of some kind on their minds in the next 18 months. They are either planning an acquisition or they are considering a sale or a recapitalization. This is not necessarily a surprise given the theme of the symposium. However, it’s also reflective of the current M&A environment where every CEO is receiving inquiries to sell or recapitalize almost daily. 
6. To infinity and beyond! Well, from paper to digital to AI to what’s next. “Digital” is now table stakes for many of the attendees—with over 50% of them generating revenues from digital offerings this year. The audience in Houston is fairly evenly split on AI deployment with about half indicating that they are using it in their businesses.
7. Another big year for raises/bonuses: Three-quarters of attendees are forecasting raises in the 1% to 5% range for the upcoming year. It’s notable that 16% are anticipating a raise budget in the 6% to 9% range. Almost 40% of attendees are anticipating higher management and staff bonuses next year.

So, it would appear that 2024 is going to play out as predicted—better than 2023, continued expansion and consolidation, with increased digitization and artificial intelligence deployment. With still not enough people to do all the work. And the 2025 preview would suggest that it’s more of the same—with the transportation, water, and health care markets providing massive opportunities for growth.

The Texas and the South M&A and Business Symposium—now in its 10^th year—is the destination for AE industry executives and investors to get a first look at how 2025 is going to play out, get the latest on trends and best practices, and network with over 200 decision-makers, investors, and experts from Texas, the South, and around the nation. Register today to reserve your place. 

To connect with Mick Morrissey, email him at [email protected] or text him at 508.380.1868.