Market Intelligence Report (2026)

Market Intelligence Report 2026

Conditions

Signals

Application

Turning Intelligence into Action

2

Before You Begin The conditions in this report are not background information. They are already shaping the decisions our clients are making, and they will shape ours. Reading them is only the first step—the more useful question is what they mean for how we work, who we serve, and where we choose to focus. As you read these themes, consider: Practice

Consider: You'll find short provocations woven throughout the report—use them as a starting point for conversation with your teams and clients.

What does this mean for how we work, and how do we need to pivot to stay market relevant?

Clients How does this affect our clients, and how can we be better partners as they navigate these headwinds?

Communities What do these shifts mean for the towns, cities, and communities our work touches—where is growth accelerating, where is it contracting, and what does that ask of us?

Contents Conditions 03

The Conditions

04

The Language of Uncertainty

05

Market Drivers

08

Demographics

09

Competitive Landscape

Signals 10

The Signals

11

Agentic and Physical AI

12

Energy Storage and Grid Resilience

13

Data Centers and Digital Infrastructure

14

Designing for Security

15

Designing for Climate

16

Longevity Economy

17

Districts Built for Experience

Application 18

SAP Prompts

Conditions

Signals

Application

Language

Market Drivers

Demographics

Competitive Landscape

3

The Conditions What we once called a volatile and uncertain environment has become something more complex: forces that move faster, intersect across industries, and resist simple labels. The language used to describe them continues to evolve, but the pressure they create does not. Conflict in the Middle East is reshaping energy markets while driving construction costs higher.

Demographic change is no longer just about population growth; it is about populations redistributing, aging in some regions and expanding rapidly in others. Meanwhile, private equity is transforming the competitive landscape through industry consolidation. These are not isolated developments.

Understanding any one of them means understanding how they interact and reinforce one another.

192%

+8

216M

38.3%

Increase in board-level action on geostrategy risk, 2021–2025

Global Construction Sentiment Index, Q1 2026

Projected internal climate migrants by 2050

Share of 2025 AEC M&A activity that was private equity or PE-backed

Sources: EY-Parthenon, Geostrategy in Practice Survey, 2025; RICS, Global Construction Monitor, Q1 2026; World Bank, Groundswell Part 2: Acting on Internal Climate Migration, 2021, as cited in earth. org, "Climate Migration: A Multidimensional Challenge Requiring Global Action," 2025; Capstone Partners, "Architecture, Engineering & Construction (AEC) Services Sector M&A Update," March 2026.

Consider

These forces are already moving together, whether or not our teams are structured to track them that way. What would it take to see language, markets, demographics, and competition as one conversation instead of four?

Conditions

Signals

Application

Language

Market Drivers

Demographics

Competitive Landscape

4

The Language of Uncertainty For years, strategists have searched for language to describe an increasingly unpredictable world. As conditions shifted, BANI emerged—Brittle, Anxious, Nonlinear, Incomprehensible—not simply to categorize disruption, but to encourage resilience and preparedness.

to emerge in European strategy circles, reflecting the continued evolution of strategic thinking as global conditions become increasingly interconnected.

Consider: How do these frameworks help your team move from feeling paralyzed by uncertainty to acting from a future-state, solutions-oriented mindset?

Each framework builds on its predecessors to address dimensions earlier models were not designed to capture— the psychological effects of uncertainty, disruptions that cascade across sectors, and the accelerating pace of interconnected change. Rather than replacing one another, they reflect a growing understanding of complexity and provide leaders with new ways to anticipate change, strengthen resilience, and identify opportunities in an increasingly dynamic world.

BANI captures the emotional and systemic experience of today's environment. EY's NAVI framework approaches the same reality from a strategic perspective—Nonlinear, Accelerated, Volatile, Interconnected—focusing less on how disruption feels and more on how it unfolds. Together, they describe the same landscape from complementary perspectives: one names the experience, the other explains the dynamics. More recently, PUMO—Polarized, Unthinkable, Metamorphic, Overheated—has begun

The Language of Uncertainty, Over Time Pre-1987—SPOD Stable, Predictable, Ordinary, Definite

1987—VUCA Volatile, Uncertain, Complex, Ambiguous

2010s—RUPT Rapid, Unpredictable, Paradoxical, Tangled

2016—TUNA

Corporate Board Risk Mitigation Strategies, 2021-2025

Turbulent, Uncertain, Novel, Ambiguous 100% 90%

From Peripheral to Central

84% 2025

2020—BANI

82% 2025

Brittle, Anxious, Nonlinear,

77%

Incomprehensible

2025

80%

67% 2025

70%

2025—NAVI 60% The shift isn't just conceptual. It's measurable. EYParthenon's Geostrategy in Practice Survey tracks how corporate boards engage with political risk across seven areas. Between 2021 and 2025, average action rates across the seven geostrategy areas nearly tripled, a signal that organizations are no longer treating geopolitical instability as background noise. What changed wasn't the existence of risk; it was the pace and the reach of it. Disruptions that once unfolded over years, now compress into months, and boards have had to respond accordingly.

Nonlinear, Accelerated, Volatile, Interconnected

50% 40% 30%

Sources: EY Megatrends 2025; EY-Parthenon Geostrategy in Practice Survey, 2025;

40%

EY-Parthenon CEO Outlook Survey, 2025;

2021

Cascio, Jamais. "Facing the Age of Chaos."

26%

20%

2021

25% 2021

22% 2021

10%

Medium, April 2020; Lichtenthaler, Ulrich.

Why Agile Innovation Is Not Enough."

Technology Management, 2025.

Regularly assesses political risk impact on strategy

Receives regular political risk briefings

Incorporates political risk into strategic decisions

Engages in scenario planning around political risks

Polarized, Unthinkable, Metamorphic, Overheated

"From VUCA and BANI to a PUMO World: International Journal of Innovation and

0%

2025—PUMO

PUMO is worth watching; not yet a primary lens in North America.

Conditions

Signals

Application

Language

Market Drivers

Demographics

Competitive Landscape

5

Market Drivers: Connected Forces The geopolitical and economic conditions described in this section reflect information available as of August 2026. Given the pace of developments in the Middle East conflict, some figures and conditions may shift before or shortly after this report is distributed.

The economic outlook, the geopolitical landscape, and the geographic conditions our clients operate in are often treated as distinct areas of analysis. In a world defined by BANI and NAVI conditions, that separation is no longer useful.

RICS Global Construction Monitor, Q4 2025–Q1 2026

Consider: How do we stay in front of clients through this uncertainty—so when the cycle turns, we've been there all along, focused on where growth is happening?

Source: RICS Global Construction Monitor, Q1 2026.

+40% Global infrastructure workload expectations (12month net balance) strengthened further in Q1 2026, from +35% in Q4 2025—the most resilient signal in an otherwise cautious global outlook.

Sources: RICS Global Construction Monitor, Q1 2026; AIA/ Deltek Architecture Billings Index, June 2026; EY 2026 Geostrategic Outlook.

The Economic Conditions

The Geopolitical Forces

The Geographic Outlook

The global economy remains in a period of uneven growth rather than a clear expansion or contraction.

RICS' Q1 2026 Global Construction Monitor indicates that overall construction sentiment remained broadly stable, but underlying conditions deteriorated as cost inflation accelerated and credit conditions weakened.

Infrastructure remains one of the most resilient areas of construction activity globally, even as many commercial sectors continue to face economic headwinds. For clients, the key question is increasingly not whether the market is improving or slowing, but which economic conditions apply to their sector, geography, and investment timeline.

EY's 2026 Geostrategic Outlook identifies persistent trade policy volatility and supply chain realignment as major pressures on costs and investment, reflecting a broader shift toward economic sovereignty and national security priorities. For the built environment, these forces are not merely background conditions—they increasingly shape materials costs, labor availability, financing conditions, and clients' willingness to commit to long-term capital investments. Geopolitical risk has become an active strategic consideration, influencing not only business decisions but also project planning, procurement, and investment timing.

RICS' Q1 2026 Global Construction Monitor highlights increasing regional variation in construction market conditions. While sentiment remained relatively stable in some markets, other regions experienced weaker expectations, underscoring the uneven nature of the global outlook. The findings reinforce that construction activity is increasingly shaped by local economic conditions, sector-specific demand, and regional market dynamics rather than a single global trend. For firms and clients alike, understanding where demand is strengthening, where it is moderating, and how conditions vary across regions has become an essential part of strategic planning.

Conditions

Signals

Application

Language

Market Drivers

Demographics

Competitive Landscape

6

Market Drivers: Conflict, Costs, and Construction Relative Crisis Size Current State of Affairs

What This Means

The conflict involving the United States, Israel, and Iran has heightened geopolitical uncertainty, disrupting energy markets, maritime trade, and global supply chains. The Strait of Hormuz—which normally carries about one-fifth of the world's seaborne oil shipments—has experienced significant disruptions to commercial shipping, increasing energy price volatility. While diplomatic efforts continue, a durable resolution remains uncertain.

nj Billings Recovery: Architecture demand continues to face headwinds from elevated financing costs and economic uncertainty. Although the ABI improved in June, billings remain below the growth threshold, suggesting that a sustained recovery will depend on improving economic conditions, stronger owner confidence, and renewed project activity. Institutional markets continue to show relative resilience.

The US AIA/Deltek Architecture Billings Index (ABI) improved to 47.3 in June 2026, up nearly three points from May, but remained below the 50-point threshold for a 41st consecutive month—the longest-running downturn in the index’s 30-plus-year history. While architecture billings remain under pressure, institutional work continues to show greater resilience than other major market segments, with the institutional ABI at 47.4 in June compared with 46.7 for commercial/industrial and 45.6 for multifamily residential. This relative resilience supports continued attention to institutional markets, although sector-specific investment outlooks vary by project type and geography.

47.3 The US AIA/Deltek Architecture Billings Index rose to 47.3 in June 2026, up from 44.5 in May but remaining below the 50point growth threshold for a 41st consecutive month—the longest contraction in the index's history.

nj Capital Deployment: Investment remains comparatively concentrated in infrastructure, energy, advanced manufacturing, defense, and technology-related facilities. These areas continue to provide important sources of design and construction demand, although performance varies by sector, project type, and market. nj Supply Chain Resilience: Construction continues to face cost and scheduling uncertainty related to materials, labor, energy, and global trade conditions. Procurement strategies, early planning, and delivery approaches that improve cost and schedule certainty remain increasingly important. nj Geographic Diversification: Market conditions continue to diverge across regions, sectors, and client types.

Geographic and sector diversification can help firms navigate uneven investment patterns and reduce exposure to localized economic or project-market disruptions.

The World Economic Forum's Chief Economists' Outlook (May 2026) asked chief economists to compare the potential economic impact of the Strait of Hormuz disruption with recent global shocks. Respondents viewed the disruption as more severe than the 2025 tariff turmoil and, if prolonged, expected its economic impact to approach that of the COVID-19 pandemic.

84%

2026 Iran War

40%

2025 Tariff Turmoil

Prolonged disruption to commercial shipping through the Strait of Hormuz, ongoing as of publication

COVID-19 pandemic (reference benchmark) Average respondent rating

Percentages represent the average relative impact ratings reported in the World Economic Forum's Chief Economists Outlook (May 2026).

Sources: World Economic Forum, Chief Economists Outlook, May 2026; AIA/Deltek Architecture Billings Index, June 2026; Lloyd's List Intelligence, Strait of Hormuz Brief, July 2026; U.S. Energy Information Administration (EIA), The Strait of Hormuz Is the World's Most Important Oil Transit Chokepoint (background reference).

Conditions

Signals

Application

Language

Market Drivers

Demographics

Competitive Landscape

Market Drivers: Global Growth Outlook

7

Strait of Hormuz Disruptions

As the war in the Middle East continues to affect energy markets, trade, and financial conditions, its economic impact is varying significantly across regions and economies. The IMF’s July 2026 World Economic Outlook Update projects global growth of 3.0% in 2026 and 3.4% in 2027, with the effects of the war partly offset by continued technology-driven investment. The outlook remains highly uneven: energy importers and economies with limited exposure to the technology cycle face greater pressure, while energy exporters and economies integrated into technology value chains remain comparatively resilient. The IMF’s projections also assume a gradual reopening of the Strait of Hormuz beginning in mid-July, with conditions broadly normalizing by March 2027.

Region

Asia-Pacific

Classification

Description of 2026-2027 Real GDP Growth Projections

Relative Strength

India (6.4% / 6.7%) remains the fastest-growing major economy, while China slows to 4.6% / 4.1% amid structural and energy-related headwinds.

65 out of 75 vulnerable economies are net importers of oil, impacting 983M people.

Source: United Nations Conference on Trade and Development, June 2026

The Unequal Weight of Uncertainty Africa

Mixed

Sub-Saharan Africa grows 4.3% / 4.5%, but conditions vary widely; Nigeria benefits from energy exports, while South Africa remains slower at 1.1% / 1.3%.

Central and Eastern Europe

Moderate

Emerging and Developing Europe grows 1.9% / 2.1%, with energy costs offset partly by defense spending and favorable commodity effects.

Latin America

Stable/Moderate

Growth holds at 2.4% / 2.7%; Brazil remains resilient at 2.4% / 2.2%, while Mexico accelerates to 1.2% / 1.9%.

North America

Relative Resilience

US growth of 2.3% / 2.2% benefits from technology investment and its net energyexporter position; Canada remains slower at 1.1% / 1.7%.

Western Europe

Slower Growth

Euro-area growth remains subdued at 0.9% / 1.2%, with Spain outperforming at 2.1% / 1.8%.

Vulnerable economies are absorbing the worst of the energy shock. Of 75 vulnerable economies, 65 depend on imported oil—86% of least developed countries and 87% of small island developing states.

Nearly a billion people, 983 million, live in these economies, where over 30% already survive below $3 a day. António Guterres, Secretary-General of the United Nations, stated, "When the Strait of Hormuz is strangled, the world's poorest and most vulnerable cannot breathe."

3.4%

4.9%

IMF's projected GDP 2027, attributed to the effects of energy pressure in the Middle East against accelerated AIdriven technology investment.

IMF's projected GDP 2027 growth for the low-income developing economies.

While growth remains positive, many of these economies continue to face limited fiscal and institutional capacity to absorb external shocks.

Sources: International Monetary Fund (IMF), World Economic Outlook Update, July 2026; United

Middle East

High Volatility

Growth falls to 0.7% in 2026 before rebounding to 6.5% in 2027, reflecting the assumed disruption and normalization of energy flows through the Strait of Hormuz.

Nations Conference of Trade and Development (UNCTAD), "Strait of Hormuz Disruptions: The burden of oil price shocks on vulnerable economies," June 2026.

Conditions

Signals

Application

Language

Market Drivers

Demographics

Competitive Landscape

8

Demographics: A World in Motion Population is not simply growing. It is redistributing, aging in some places, surging in others, and increasingly influenced by climate-related mobility. Each creates different clients, needs, and geographies of demand.

The Aging Wave

Youth in Flux

Climate Migration

The world's population is aging, and that shift is no longer confined to wealthy economies—most older adults will soon live in low- and middle-income countries still adapting their housing, healthcare, and civic infrastructure to meet the change. In some places, aging has already tipped into outright contraction: several major economies, particularly in East Asia and parts of Europe, are now shrinking as birth rates fall below replacement levels. The US has historically leaned on immigration to offset its own aging population, but that offset has weakened in recent years.

Africa's population continues to grow rapidly and urbanize, generating long-term demand for housing, infrastructure, and civic services across the continent.

South Asia is following a similar trajectory, while parts of Latin America and Southeast Asia are moving through demographic transition toward lower fertility and older populations. In the US, the college-age population is shrinking as smaller birth cohorts move through the system, a structural pressure that's already forcing consolidation among institutions. Tighter immigration and visa policy is compounding that pressure by reducing international enrollment.

Climate-related mobility is reshaping where people live, and it isn't only an international story. Within the US, populations are beginning to shift away from high-risk flood and hurricane zones, driven as much by the rising cost and shrinking availability of insurance as by the disasters themselves. Globally, the World Bank projects large-scale internal displacement by mid-century as water scarcity, sea-level rise, and other slow-onset impacts reshape population distribution—creating both growth pressure in receiving communities and under utilized infrastructure in the places left behind.

Consider: What do these shifts mean for the cities and communities we serve, and how can organizations plan for resilience, adaptation, regeneration, and long-term growth?

Sources: WHO, Ageing and Health Fact Sheet, accessed 2025; UN DESA, World Population Prospects 2024; OECD/African Development Bank/UCLG Africa/Cities Alliance, Africa's

22%

2X

216M

Urbanisation Dynamics 2025; World Bank, Groundswell Part

Share of global population projected to be over age 60 by 2050, up from 12% in 2015.

Africa's projected urban population by 2050 versus today.

Projected internal climate migrants by 2050.

Congressional Budget Office, The Demographic Outlook:

2: Acting on Internal Climate Migration, 2021; U.S. Census Bureau, Vintage 2025 Population Estimates, January 2026; 2026 to 2056, January 2026; WICHE, Knocking at the College Door, 11th Edition, December 2024; NAFSA: Association of International Educators, Fall 2025 International Student Enrollment Snapshot & Economic Impact, November 2025; Redfin analysis of U.S. Census Bureau and First Street Foundation data, June 2026.

Conditions

Signals

Application

Language

Market Drivers

Demographics

Competitive Landscape

9

Competitive Landscape Modest Economic Growth

Planning Pipeline

Competition from Private Equity

The outlook for 2026 and 2027 remains one of moderate but uneven growth.

The IMF’s July 2026 World Economic Outlook Update projects global GDP growth of 3.0% in 2026 and 3.4% in 2027, with significant variation across regions and economies. The US remains relatively resilient, while many advanced economies face slower expansion and persistent uncertainty. For the built environment, investment is becoming increasingly concentrated in markets with stronger structural demand, including healthcare, institutional facilities, infrastructure, and data centers, while traditional office development and other interest-rate-sensitive projects continue to face headwinds.

Planning activity remains elevated, although momentum varies significantly by sector. The US Dodge Momentum Index rose sharply through much of 2025 and early 2026, with data centers continuing to drive commercial planning and healthcare and other institutional sectors showing renewed momentum. In June 2026, overall planning declined modestly, but institutional planning increased 10.9% while commercial planning fell 6.8%.

Because the DMI typically leads nonresidential construction spending by 12–18 months, the planning pipeline provides a positive signal for selected construction markets into 2027, although economic and financing uncertainty remain important risks.

Private equity continues to reshape the competitive landscape across AEC services. Capstone Partners reports that AEC M&A activity accelerated in 2025, with sustained PE interest driven by the sector’s fragmentation, durable demand, and exposure to high-growth markets including data centers, energy, and infrastructure. PE-backed buyers are increasingly pursuing platform and add-on acquisitions, intensifying competition for high-quality firms and specialized capabilities. As consolidation continues, differentiation, sector expertise, geographic reach, and strong client relationships become increasingly important competitive advantages.

AIA Consensus Forecast: 2027 Nonresidential Construction Spending Growth in the US

+25.0%

Data centers Commercial (overall)

+5.8%

Hotels / lodging

+5.2%

Healthcare

+4.4%

Nonresidential (overall)

+3.0%

Institutional (overall)

+2.7%

Consider: As modest growth reshapes where the work is and private equity reshapes who we compete with, how do we stay agile and innovative—focused on the clients and markets that matter most, backed by real market intelligence?

-0.6%

Manufacturing -4%

0%

5%

10%

15%

20%

25% Sources: IMF, World Economic Outlook Update, July 2026; AIA/Deltek Architecture Billings Index, June 2026; AIA Consensus Construction Forecast, July 2026; Dodge Construction Network, Dodge Momentum Index, June 2026; Capstone Partners, AEC Services Sector M&A Update, March 2026.

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

The Signals Three forces are reshaping the built environment: Infrastructure and Systems, Resilience, and Human Experience. They are increasingly interconnected—and firms that treat them separately risk solving yesterday’s problems.

Consider

Intelligence is moving into the building itself, as systems increasingly reason, adapt, and

These forces do not arrive one at a time.

operate with less human intervention. That intelligence has a physical footprint: the

Where are we still waiting for certainty when the

computing power behind it must be housed, powered, cooled, and connected, placing

connections are already clear?

new demands on infrastructure and energy systems. Agentic AI, data centers, and energy storage are part of a larger shift in what buildings must do—and support.

At the same time, climate risk and security concerns are converging around a shared expectation: buildings must perform under stress, not just under normal conditions Much of this remains invisible to occupants. Their experience does not. As people become more selective about where they work, live, gather, and spend their time, experience increasingly shapes occupancy, retention, and the value of mixed-use environments. Performance and experience are becoming inseparable measures of success.

Infrastructure and Systems

Resilience

Human Experience

Agentic and Physical AI

Designing for Climate

Longevity Economy

Data Centers and Digital Infrastructure

Designing for Security

Districts Built for Experience

Energy Storage and Grid Resilience

Energy Storage and Grid Resilience

Note: Energy Storage and Grid Resilience spans both Infrastructure and Systems and Resilience—the same systems making buildings smarter are the ones making them dependable under stress.

10

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

11

Agentic and Physical AI THE SIGNAL

OVERVIEW

WHAT THIS MEANS FOR DESIGN

IN BRIEF

AI that doesn't just respond. It acts. These systems reason, plan, and make decisions on their own, moving fast into the environments our clients ask us to design.

For years, AI meant a tool you talked to. Agentic AI changes that fundamentally. These are systems that act independently.

Add physical AI to the picture—intelligence embedded in robots, sensors, and building systems—and you begin to see what is actually shifting. Not just how work gets done, but what the spaces that support that work need to become.

Floors must bear new loads. Corridors must accommodate new actors. Power, connectivity, and flexibility are no longer amenities; they are structural requirements.

Corridors Are Getting Wider: Robotics need room to move. Edge computing needs a home.

Clinical floors need charging infrastructure woven in. The building has to be ready for systems that do not yet exist.

AI has moved past the chat window. Agents now act, coordinate, and make real decisions across building systems, with or without human intervention.

Sources: Gartner 2025; McKinsey & Company, The State of AI in 2025: Agents, Innovation, and Transformation, 2025; MarketsandMarkets, Physical AI Market Global Forecast to 2032, April 2026; Precedence Research, 2026.

McKinsey research finds that in any single business function, no more than 10% of organizations are scaling agentic AI. The gap isn't about the technology. It's about governance and the organizational capability to operate these systems at scale. The buildings we design today will spend most of their lives in a world still closing that gap.

Labs Are Being Reimagined: Automated research systems and AI-driven equipment are changing what a functional bench looks like, how controlled environments get monitored, and what it means for space to be truly flexible.

Circulation Is Becoming Choreography: AI is already determining how people flow through terminals and campuses, routing foot traffic, flagging security anomalies, and adjusting wayfinding in real time. That logic has to be built into the spatial design from the start.

Classrooms Are Asking New Questions: What does a learning environment look like for students who are growing up with AI as a collaborator, not a novelty?

Infrastructure Is Becoming Intelligence: The decisions made at the planning scale determine whether buildings can participate in intelligent city systems at all. That conversation starts long before schematic design.

Our clients will soon be asking not just whether their buildings are connected to AI systems, but how those systems will shape the way people use and move through the spaces we design. This shift is already underway.

Physical AI is already embedded in robotics, HVAC, security, and wayfinding. This is changing what buildings need to be, not just what they do.

WHAT TO WATCH

By 2028, Gartner projects that at least 15% of day-today work decisions will be made autonomously through agentic AI, up from 0% in 2024. Meanwhile, the global physical AI market is projected to grow from $1.50 billion in 2026 to $15.28 billion by 2032, as AI moves into robots, autonomous machines, and other systems that can perceive, reason, and act in the physical world.

$199.05B

$15.28B

Projected agentic AI market size by 2034

Projected physical AI market size by 2032

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

12

Energy Storage and Grid Resilience THE SIGNAL

OVERVIEW

WHAT THIS MEANS FOR DESIGN

IN BRIEF

Energy resilience has moved out of the mechanical room and into the design conversation.

Clients are asking about it earlier than ever before.

For most of the history of building design, energy came from somewhere else. It arrived through a wire, and the building consumed it. That is changing. More frequent extreme weather, surging electricity demand from AI infrastructure, aging utility grids, and rapidly falling battery costs are making

Backup Is Becoming Primary: Clients are moving from generator backup to integrated battery and solar microgrid systems that sustain critical loads for days, not hours. Battery storage, transformer infrastructure, and microgrid controls need to be resolved at

onsite energy storage a basic expectation rather than a nice-to-have.

schematic design.

Energy storage is moving from a contingency measure toward foundational building infrastructure, much like HVAC or plumbing. The question is increasingly not whether a building needs storage capacity, but how it is integrated from the start.

The cost of that demand is also becoming visible to clients and consumers alike. US electricity prices rose 6.9% in 2025, more than double the rate of inflation, and are projected to climb further through 2027. For clients, that shifts the calculus on onsite generation from a resilience question to a cost-control one. For the communities around them, rising electricity costs affect disposable income and spending power, adding a social dimension to where and how energy infrastructure gets sited.

Sources: Lawrence Berkeley National Laboratory, 2026; U.S. Energy Information Administration, 2025; J.D. Power, 2025; Wood Mackenzie / American Clean Power Association, 2025; S&P Global / 451 Research, October 2025.

In the first half of 2025, 45% of US utility customers experienced a power outage. The average duration of their longest outage reached 12.8 hours, up from 8.1 hours in 2022— underscoring the growing need for more resilient energy infrastructure.

Campuses Are Becoming Energy Districts: University and corporate campus master planning now regularly includes energy zone mapping alongside land use. The building and its power system are being designed together.

Schools Are Being Asked to Do More: Schools are increasingly being designed as community resilience hubs, places that can shelter residents during extended outages.

Independence Is Becoming the Expectation: The goal has shifted from weathering disruption to designing buildings that do not need the grid to function. For clients in healthcare, education, and civic use, that distinction is becoming a baseline requirement.

US battery storage is expanding rapidly, with 15 gigawatts (utility-scale) added to the grid in 2025 and another 24 gigawatts planned for 2026—a signal that storage is becoming a core component of the energy system.

Microgrids are moving beyond traditional utility and military applications into hospitals, schools, campuses, and other commercial and community settings.

AI-driven data center demand is straining regional grids and already affecting interconnection, permitting, and siting decisions. Where a building can be built—and what it must be capable of—is increasingly a grid question.

WHAT TO WATCH Power Is Becoming a Systems Question: Shared microgrids and grid-interactive buildings are showing up in master plans at every scale, asking designers to think about power as a connected system rather than a buildingby-building decision.

Transportation Is Joining the Conversation: Aviation and transit leaders are watching this play out. Capacity pressure, aging infrastructure, and utility modernization are converging on the same capital planning tables, adding transportation clients to the list of sectors rethinking their relationship to the grid.

By 2030, U.S. data centers could consume 11.8% of the nation’s electricity—nearly three times their 2023 share of 4.4%.

18.9 GW

134.4 GW

US battery energy storage installed in 2025, a record high (all segments)

Projected US data center grid demand by 2030 (peak grid power demand)

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

13

Data Centers and Digital Infrastructure THE SIGNAL

OVERVIEW

WHAT THIS MEANS FOR DESIGN

IN BRIEF

The AI boom is triggering one of the largest infrastructure buildouts in decades. Design will determine whether it becomes a liability or a legacy.

Data centers are expanding at unprecedented scale, driven

by AI and cloud demand. The growth is increasing demand for power, cooling, grid capacity, and specialized infrastructure.

Community Integration Is No Longer Optional: Facilities designed with attention to visual impact, noise, water use, and local economic benefit are better positioned to address growing community expectations around data center development. Community concerns are increasingly being

Global data center electricity demand is rising rapidly, driven in large part by AI. Higher rack densities are fundamentally changing the power and cooling requirements these buildings must support.

The environmental footprint is significant. Rising electricity demand, water use, land requirements, and grid impacts are increasingly shaping where data centers can be built and how they are regulated. Community and political scrutiny is growing alongside the buildout, with governments moving toward greater oversight of energy, infrastructure, and local impacts.

A data center must increasingly be designed for high power density, grid resilience, regulatory requirements, and rapidly evolving digital workloads.

translated into formal policy, including moratoria, permitting restrictions, and new requirements regarding energy and infrastructure impacts.

Power and Cooling Infrastructure: Cooling can represent a significant share of a data center's energy use, and higher-density computing is accelerating the shift toward liquid and other advanced cooling systems.

Site Selection and Grid Strategy: Design teams that understand energy infrastructure, grid interconnection, and on-site generation are becoming essential partners in site selection—not just building delivery.

Sustainable Design at Scale: Regulatory frameworks are setting mandatory efficiency thresholds, moving energy modeling and carbon analysis from value-add services to baseline deliverables.

Sources: International Energy Agency, 2026; Lawrence Berkeley National Laboratory, 2026; JLL, 2026; European Commission, 2026; Fortune Business Insights, 2026; Utility Dive, 2026.

The IEA says global data-center electricity consumption is projected to more than double to around 945 TWh by 2030, driven primarily by AI.

Adaptability: Digital workloads and infrastructure requirements can evolve faster than traditional construction timelines. Facilities designed with flexibility built in—modular power distribution, generous structural bays, scalable cooling infrastructure—will outlast those designed to a single point-in-time specification.

Research Buildings Feel It Too: Science and technology facilities are encountering many of the same power, cooling, and resilience constraints as larger data centers—at a smaller scale.

Energy efficiency is becoming a baseline design consideration. Regulatory frameworks are increasing transparency and performance expectations, with the EU establishing reporting requirements and developing common sustainability ratings and minimum performance standards for data centers.

Hyperscalers face mounting scrutiny over land use, water consumption, and grid strain. Access to power is increasingly a defining factor in site selection, alongside grid capacity, community considerations, land, water, and proximity to customers.

WHAT TO WATCH

Meeting growing data center energy demands will require a mix of solutions that balance reliability, sustainability, resilience, and community needs.

Renewable energy, advanced nuclear, storage, and other emerging technologies are expanding the options. Navigating increasingly complex energy and infrastructure systems will be an important design capability.

$699.13B

426 TWh

Global data center market value by 2034

Projected US data center grid demand by 2030 vs 183 TWh in 2024 (annual electricity consumption

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

14

Designing for Security THE SIGNAL

OVERVIEW

As geopolitical instability, hybrid warfare, and the convergence of cyber and physical threats reshape the global security landscape, buildings are being asked to perform in ways that earlier generations were not built to address.

Security and defense are not synonyms, and the distinction matters for design practice. Defense infrastructure covers the facilities and systems supporting military and national security operations—a category growing rapidly as governments respond to a more contested world. Security-integrated design is broader, spanning every environment where people need to be protected: hospitals, schools, civic buildings, transit hubs, and urban public spaces.

These two conversations are converging. The same geopolitical conditions driving record defense budgets are producing sustained threats to civilian infrastructure.

The same technologies enabling cyber-physical attacks on energy grids are reshaping what it means to make any building secure.

WHAT THIS MEANS FOR DESIGN

IN BRIEF

New Facility Typologies: Hardened command centers, NATO-standard installations, resilient border infrastructure, and classified research facilities represent a growing and specialized segment of global project demand with design requirements that go well beyond conventional building types.

The boundary between digital and physical security is increasingly blurred. For buildings and campuses, cyber threats and physical security can no longer be treated as separate concerns—they increasingly interact through the same systems and infrastructure.

Infrastructure Resilience: Energy facilities, data centers, transit infrastructure, and any building within a critical supply chain are being designed from the outset for disruption scenarios rather than retrofitted after incidents occur.

Cyber-Physical Security: Smart building technology has created new attack surfaces.

Sensors, access controls, and building management systems are no longer just operational tools—they are security vulnerabilities that must be designed for from day one.

Civic and Public Spaces: Legislation like Martyn's Law reflects a broader global shift: Public-facing buildings must demonstrate how they will protect the people inside them. This affects the full range of building types our clients own and operate.

Sources: SIPRI, 2025; IISS, The Military Balance 2026, 2026; MarketsandMarkets, 2026; UK Home Office / Pool Re, 2025; NATO, 2025; EU Critical Entities Resilience Directive, 2025.

Global military spending reached a record $2.9 trillion in 2025, the 11th consecutive year of growth, reshaping what defense, federal, and allied infrastructure must become.

Human-Centered Security: The challenge across all these contexts is embedding security logic without producing environments that feel hostile or institutional. That is a design problem as much as a security one.

Health Systems Are Hardening Too: Hospitals sit squarely within the environments this signal addresses—protected not just by physical security but by continuity of care during disruption, from cyberattacks on connected medical devices to grid failures that threaten critical operations.

Governments are increasingly moving security from a compliance exercise toward a core resilience and design consideration. In the UK, the Terrorism (Protection of Premises) Act 2025—known as Martyn's Law—requires certain public premises and events to strengthen preparedness and, for larger sites, reduce vulnerability to terrorist attacks. The EU's Critical Entities Resilience Directive similarly requires member states to establish frameworks to strengthen the resilience of critical entities.

Canada is also increasing defense investment, reaching NATO's 2% GDP benchmark in 2025–26 and committing to the Alliance's 5% target by 2035. The investment includes military infrastructure, readiness, and critical defense-related assets—extending the implications of this shift beyond Europe.

WHAT TO WATCH

European military spending rose 14% in 2025 to $864 billion, the highest level recorded by SIPRI. NATO's new 5% GDP commitment by 2035 includes at least 3.5% for core defense and up to 1.5% for defense- and securityrelated investment, including critical infrastructure and resilience.

$351.92B

250,000+

Projected global cybersecurity market size by 2030

UK premises affected by Martyn's Law

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

15

Designing for Climate THE SIGNAL

OVERVIEW

Climate adaptation is no longer a future concern. It is a present condition. The pressure to design buildings and environments that can withstand intensifying heat, flooding, drought, and extreme weather is reshaping what clients ask for, what codes require, and what responsible design looks like across every sector and geography.

For most of the history of building design, climate was a background condition—relatively stable, informing systems and envelope performance but not fundamentally challenging them. That assumption is no longer valid. Climate adaptation asks a different question of every project—not just how a building performs under normal conditions, but how it holds up when conditions become extreme. Nature-based solutions are a central part of the answer. Green roofs, living walls, restored wetlands, urban tree canopies, and permeable surfaces do not just reduce a building's environmental impact.

They actively buffer buildings and communities against heat, flooding, and air quality degradation in ways that engineered systems alone cannot.

Sources: World Resources Institute, 2025; World Meteorological Organization, via Green Design Consulting, 2024; UNEP State of Finance for Nature, 2026; UNEP Adaptation Gap Report, 2025; Climate Policy Initiative, 2026; Boston Consulting Group, 2023; ArchDaily, 2025; IPCC Sixth Assessment Report, 2021; Mordor Intelligence, 2026.

WRI research finds that every $1 invested in climate adaptation and resilience can generate more than $10 in benefits over ten years.

Buildings designed today will operate in climate conditions that may differ significantly from the historical conditions reflected in many codes and standards.

WHAT THIS MEANS FOR DESIGN

Sites Are Being Read Differently: Flood risk, heat island intensity, wildfire exposure, and sea level projections are now part of site analysis before a project even begins. Clients are beginning to ask these questions before they acquire land.

The Envelope Is Doing More Work: A building's skin is being designed to manage extreme heat, solar gain, and moisture in ways that go well beyond energy performance. Passive strategies that reduce mechanical load are becoming baseline expectations, not sustainable design upgrades.

Landscapes Are Load-Bearing: Green infrastructure, living roofs, urban tree canopies, and restored wetlands are being integrated as functional systems, not amenity features. They manage stormwater, reduce heat, improve air quality, and extend the life of the building envelope.

Existing Buildings Are the Frontier: The majority of the buildings our clients will occupy in 2050 already exist. Retrofitting them for climate resilience is one of the most significant design challenges of the next two decades.

Codes Are Catching Up, Unevenly: Building codes in some jurisdictions are beginning to incorporate climate projections. In many others, they have not.

Designing to current code minimums is increasingly insufficient for buildings expected to perform for 50 or more years.

IN BRIEF

Climate risk is becoming a material consideration for investment, infrastructure, and design. Recent WMO assessments show that climate indicators and extremeweather impacts continue to intensify, while the economic consequences are increasingly visible across communities and infrastructure.

The resilience investment gap remains significant.

UNEP estimates that global investment in nature-based solutions reached $220 billion in 2023 but needs to increase to approximately $571 billion annually by 2030 to meet growing climate and biodiversity needs.

For the built environment, adaptation is becoming an investment decision—not simply a risk-management exercise. Buildings and infrastructure designed for today's conditions may need to perform under more frequent heat, flooding, wildfire, drought, and other climate stresses over their service lives.

WHAT TO WATCH

A heat event that once occurred every 50 years is now likely to occur nearly three times as often. Sea levels will continue rising through 2100, increasing long-term risk for coastal communities and infrastructure.

$763B

12-14x

Projected global green buildings market size by 2031

The gap between what developing countries need for climate adaptation and what they currently receive

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

16

Longevity Economy THE SIGNAL

OVERVIEW

The buildings we design are going to outlive the assumptions we made when we designed them. The longevity economy is not just about senior living. It is about rethinking what it means for every building type to serve people across the full arc of a life.

For most of building design's history, older adults were a specialty market. Senior living was its own typology, separate from the buildings where everyone else worked, learned, and gathered. That assumption is changing. As the 65-andolder population becomes the fastest-growing demographic in nearly every market we serve, aging is no longer a niche concern—it is a mainstream design challenge that touches every building type and every market. The question is not whether our buildings will need to serve an older population.

They already do.

WHAT THIS MEANS FOR DESIGN

Clinics and Hospitals Are Moving Closer to Where People Live: As older adults seek care closer to home, health systems are building distributed networks of outpatient and ambulatory facilities. The design of those spaces must work for people with varying mobility, cognition, and sensory capacity.

Workplaces Are Becoming Multigenerational: Offices are being asked to support people across a much wider range of physical capability, work style, and career stage than ever before. Ergonomics, acoustics, and wayfinding are no longer afterthoughts.

Civic Buildings Are Being Asked to Do More: Libraries, community centers, and public spaces are increasingly serving as anchors for older adults seeking connection, programming, and services.

Housing Is Being Redesigned Around Staying Put: Aging in place is reshaping residential and mixed-use design, from accessible unit layouts to shared amenity spaces that support both independence and community.

Sources:

The UN reports that by 2030, 1 in 6 people worldwide will be over age 60.

Campuses Are Thinking Intergenerationally: Universities and corporate campuses are beginning to explore how their facilities can serve older populations alongside younger ones, from continuing education to co-located senior living.

IN BRIEF

The longevity economy is already reshaping how people live, work, and spend. In the US, adults 50 and older generated $12.5 trillion in economic activity in 2024, according to AARP—an economic force that extends across healthcare, housing, consumer services, and the workplace.

Longer working lives are also changing the workplace. As people remain active in work and communities later in life, buildings must support a wider range of ages, abilities, and needs.

WHAT TO WATCH

Post-acute care volumes are projected to grow 31% over the next decade, driven by population aging, rising acuity, and more recovery, rehabilitation, and chronic care shifting beyond traditional hospitals. Vizient expects much of this growth to occur through homebased services, while outpatient volumes are projected to grow 20%—reinforcing the shift toward a more distributed continuum of care.

WHO, 2025; United Nations, 2025; IMD / World Economic Forum, 2025; Global Wellness Institute, 2026; AARP Global Longevity Economy Outlook, 2026; Vizient, 2026 Impact of Change Forecast, June 2026; CBRE Research, Q1 2026.

31%

145%

Projected growth in post-acute care volumes by 2036

Growth in outpatient surgery center leasing, 2022–2025

Conditions

Signals

Application

Agentic and Physical AI

Energy Storage and Grid Resilience

Data Centers and Digital Infrastructure

Designing for Security

Designing for Climate

Longevity Economy

Districts Built for Experience

17

Districts Built for Experience THE SIGNAL

OVERVIEW

WHAT THIS MEANS FOR DESIGN

IN BRIEF

The economic case for experience-anchored, mixed-use districts has become compelling enough to reshape how developers, cities, and institutions think about what to build—and how success is measured over time. What has changed is not the idea of experiential design, but the strength of the market evidence behind it. Across sectors, clients are seeing measurable returns from spaces designed around human experience, and that evidence is increasingly driving investment at the district scale.

For most of commercial real estate’s history, the investment case rested on a single use: offices generated rent from tenants; retail centers from retailers. That logic is under pressure—not because buildings have failed, but because people’s relationship with the built environment has changed.

The Full Arc of Experience Is a Design Problem: How people arrive, move through, and remember a district shapes whether they return. Arrival sequences, transitions, and repeated-use moments are design decisions with measurable effects.

The single-use model is losing ground. Mixed-use developments can create stronger leasing and value propositions by combining complementary uses and extending activity beyond a single purpose.

People are more deliberate about where they spend time and less tolerant of spaces that fail to meet their needs. Experience is increasingly measurable in where people go, how long they stay, and whether they return.

The Anchor Is Just the Beginning: Stadiums, cultural institutions, and transit hubs generate foot traffic. The opportunity is everything around them—the streets, plazas, and mix of uses that give people reasons to stay and return. Increasingly, that includes the office itself, which must justify the commute like any other destination.

Sources: Path Intelligence, 2007; Gensler Research Institute, 2025; Grand View Research, 2025; Metatech Insights, 2025; GlobalData, 2025; Harvard T.H. Chan School of Public Health, Healthy Buildings Program; MacNaughton et al., International Journal of Building Science, 2025; Fortune Business Insights, 2026; Klutch Sports Group / RBC, "Sports-Anchored, Mixed-Use Districts" white paper, April 2025; RCLCO, 2025.

Successful projects are treating this shift as an economic reality, not a design preference. Anchor venues—stadiums, cultural institutions, transit hubs—generate foot traffic, but the real opportunity lies in the streets, programming, and mix of uses that turn a single reason to visit into multiple reasons to stay and return.

A 1% increase in dwell time is associated with a 1.3% increase in sales, while the experiential retail market has grown from approximately $85 billion in 2023 to $118.16 billion in 2025.

Sensory Alignment Is a Performance Criterion: Light, acoustics, thermal comfort, and materiality shape how people experience a space. When sensory conditions align, environments feel coherent; when they do not, experience suffers.

Data Is Closing the Gap Between Intent and Outcome: Behavioral analysis, post-occupancy evaluation, and environmental monitoring are giving designers new ways to understand how districts are actually experienced—not just how they were intended to perform.

Community Benefit Is Not Optional: Destination districts are increasingly expected to deliver affordable housing, jobs, and community resources alongside commercial returns. The design brief now includes what a district makes possible for the people who live nearby.

Experiential design is becoming an increasingly important driver of retail and real estate performance.

Longer dwell times, stronger foot traffic, and repeat visitation are creating new ways to measure value.

The global sports tourism market was estimated at $803.9 billion in 2025 and is projected to reach $2.8 trillion by 2033, growing at a CAGR of 16.8%. The infrastructure investment following that demand is reshaping cities around the world.

In major office markets, experience, amenities, and flexibility are increasingly influencing leasing decisions.

WHAT TO WATCH

Only 20% of North American professional sports teams currently play in stadiums located within sportsanchored mixed-use districts. With $100 billion in investment projected for new sports-anchored districts over the next 15 years—and nearly 50 stadium leases set to expire between 2030 and 2039—the opportunity to rethink what surrounds the venue is substantial.

$315.37B

$192B

Projected global experiential retail market size by 2034, up from $118.16 in 2025

Global stadium and arena construction pipeline, 2025

Conditions

Signals

Application

18

Application

Work

The report doesn’t stop at what’s happening. It’s built to change what you do next—starting with how you plan.

The information included is the raw material for the choices your studio, practice, or discipline will make.

The grid on the right uses that same material to prompt a specific kind of thinking: not what’s true, but what it means for your Strategic Action Plan.

Nine Dimensions, One Report

Aspirations

Transformations

These are the same nine dimensions used in your Strategic Action Plan.

Each one poses a starting question, not the only question. As you build this year’s SAP, use these as a prompt to find your own—where does what’s happening in this report change what you’d submit for that dimension?

Foundations

People

Business

01 >

02 >

03 >

Design

Clients

Growth

Which signal should change what we propose, not just how we deliver it?

Which client goals are quietly at odds with these conditions?

Where does a signal point to a market we aren’t pursuing yet?

04 >

05 >

06 >

Knowledge

Collaboration

Profit

What do we need to learn now, before a client asks us to already know it?

Does our team structure reflect how interconnected these forces are?

Where is fee compression showing up, and what’s our answer beyond price?

07 >

08 >

09 >

Craft

Culture

Cash

Where does our technical depth need to catch up to these conditions?

Where would the line between vendor and partner break down first if a PE-backed rival came after this client?

Where does our pipeline lean on sectors the report flags as exposed, rather than the ones it flags as resilient?

For more information, contact us at: intelligence@perkinswill.com