42% of architecture firms can't report net profit margin, new benchmark finds

Factor A/E's 2026 A&E Industry Benchmark Report reveals that 42% of architecture and engineering firms cannot report their own net profit margin, 60% do not track realization rate, and 40% lack real-time project profitability tracking. The survey of predominantly small to mid-sized firms across the US and Canada shows that 56% experience budget overruns on over 10% of projects, often detected too late for correction. Despite 73% citing scope creep as the top budget threat, many firms rely on manual resource management: 70% use meetings, spreadsheets, or no formal process, and half assign staff by gut feel. Cash flow remains strained, with 70% waiting 31+ days for payment and 22% waiting over 60 days. Client loyalty is high—three in four firms have at least 50% repeat clients—yet 60% lack formal client satisfaction measurement. Looking ahead, 78% believe AI will have the biggest impact, but readiness is uneven due to disconnected tools. Economic uncertainty (48%) and talent shortages (28%) are top concerns, though 54% plan to expand services or enter new markets in 12–24 months. Leslie Heller, director of growth at Factor A/E, noted that firms are profitable but lack operational visibility into what drives that profitability. Factor A/E, a project management platform launched in 2021 and acquired by Total Synergy in 2025, produced the report.