Galorath's 2026 State of the Industry Report Finds 79% of Organizations Increased AI Spending on Estimation While Only 1 in 4 Have Clear AI Policies
Second annual global survey of 220 cost estimation professionals across 12 countries reveals AI adoption accelerated, but governance didn't keep pace
LONG BEACH, Calif., June 2, 2026 /PRNewswire/ -- Galorath Incorporated today released its second annual 2026 State of the Industry Report—The Governance Imperative: Cost, Schedule, and Risk Under Global Uncertainty. Based on a survey of 220 cost estimation and planning professionals across 12 countries and nine industry sectors, the report documents a widening gap between the speed at which organizations are adopting artificial intelligence and the governance structures they have in place to manage it.
Last year's inaugural report found that AI adoption was lagging behind the hype, with 63% of organizations reporting no AI integration in their daily workflows. That picture has changed. In the 2026 data, 79.1% of organizations report increasing their AI investment, and 60% are actively experimenting with or piloting AI in estimation. But the governance infrastructure hasn't kept pace with the spending. The result is the paradox at the center of this year's findings: organizations are simultaneously restricting and adopting AI, with the fastest-growing usage happening outside formal oversight.
Conducted in partnership with NewtonX, the study surveyed 135 organizational leaders and 85 operational practitioners across manufacturing, aerospace and defense, electronics, transportation, energy, software, healthcare, automotive, and telecommunications. The 2026 edition introduces 15 sector-specific vertical briefs, each downloadable individually, that translate cross-industry findings into targeted benchmarks for specific markets.
"A year ago, the concern was that organizations weren't adopting AI fast enough," said Charles Orlando, chief strategy officer at Galorath. "Now they are, and the new problem is that governance didn't move with it. Organizations have more data, more tools, and more visibility than at any point in modern history, but their confidence in translating that into reliable plans is declining among the leaders closest to strategic risk."
The report surfaces a sharp divide in AI outcomes. Among the organizations actively increasing their AI investment, 51% report significant improvement in planning accuracy and estimation confidence. Among the organizations taking a more cautious approach, only 11.1% report the same. The differentiator is not adoption itself but the depth of commitment: AI paired with governance, integration, and process redesign produces measurable results; AI layered onto existing workflows without structural change does not.
That divide also plays out against a backdrop of broken governance. Nearly four in five organizations (77.7%) report data governance restrictions that limit AI adoption in estimation workflows. Yet 70.9% simultaneously report that shadow AI, meaning informal and ungoverned AI use, is common in their operations. Only 23.6% of respondents report having clear, documented AI policies. Governance systems are restrictive enough to slow formal AI deployment but too porous to prevent informal adoption, creating an environment where the fastest-growing AI usage is the least governed.
The data also surfaces a notable confidence gap between organizational levels. Among operational practitioners, 20% report being "very confident" in their organization's estimation processes. Among organizational leaders, that figure drops to 11.9%, a gap that inverts conventional assumptions about where confidence sits in an organization. Despite a year of increased AI spending and broader adoption, overall confidence has not meaningfully improved from the 2025 baseline, a directional comparison that suggests organizations invested more without feeling materially better about the accuracy of their plans.
The source of uncertainty has also shifted. Trade policy has displaced cost volatility as the single largest external disruptor, cited by 47.3% of respondents and outpacing regulatory constraints (34.5%) and energy pricing (10.5%). Practitioners report trade policy impact at 52.9%, compared to 43.7% among leaders, a gap that reflects how policy volatility hits execution before it registers at the strategic level.
"The 51%-to-11% gap in AI outcomes is the finding that should get the most attention," Orlando added. "It suggests that the organizations seeing results aren't just spending more on AI. They're restructuring how estimation works within their organizations: centralizing governance, integrating tools into production workflows, and treating AI adoption as a process redesign problem rather than a procurement decision. The ones that aren't doing that are spending money without changing outcomes."
The 15 vertical briefs, released for the first time alongside the main report, cover aerospace and defense, automotive, construction, electronics, energy, financial services, healthcare, IT and software, manufacturing, maritime and shipbuilding, pharmaceuticals, professional services, space systems, telecommunications, and transportation and logistics. Each brief benchmarks sector performance against the global dataset and is available as a standalone download at galorath.com/soti.
Methodology
The survey was conducted in February 2026 in partnership with NewtonX, a B2B research firm specializing in expert-verified professional panels. Respondents were segmented by organizational role, organization size, and industry sector. The analysis applies cross-tabulation, role-based segmentation, and directional year-over-year comparison against the 2025 baseline.
About Galorath Incorporated
Galorath delivers an AI-powered business operations intelligence platform grounded in decades of real-world validation of costs, schedules, and risks across operations, supply chains, and manufacturing. The flagship SEER® platform is trusted by industry leaders in high-stakes environments, including Accenture, NASA, Boeing, the U.S. Department of Defense, and BAE Systems. Built on Galorath's trusted SEER modeling framework, the platform combines analytical depth with intuitive access to accelerate time-to-market, enhance project predictability and visibility, and keep project costs on track. For more information, visit galorath.com.
SOURCE Galorath
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