Coming off a record-setting year for the nonresidential construction industry (more than $760 billion was spent on new construction and renovation work nationwide last year), AEC firm leaders should be brimming with confidence over the growth potential for their firms heading into 2019. The arrow is pointing up for nearly all building sectors, construction backlogs remain healthy, and architecture firms continue to see strong demand for their design services, according to AIA and ABC data.
Yet despite the positive indicators for the market, AEC professionals remain largely cautious when it comes to growth prospects for 2019. In October, BD+C surveyed 314 readers about their thoughts on a variety of issues: materials prices, bid prices, obstacles to growth, emerging opportunities, etc. Only slightly more than half (56.0%) of industry professionals expect higher revenue for their firm in 2018 compared to last year. More surprisingly, 13.4% are forecasting a decrease in revenue.
And their forecast for 2019 isn’t much rosier: 54.7% expect revenue to increase, 8.7% call for a drop, and 36.7% predict flat revenue this year. This is a markedly different sentiment than last year’s respondents, who were much more upbeat with their forecasts for the upcoming year: 62.0% predicted revenue to rise and only 6.1% called for it to drop.
When asked about their top concerns for 2019, the largest number of respondents cited “general economic conditions” (52.7%) as a key issue, followed by “competition from other firms” (41.0%) and “price increases in materials and services” (39.0%). In fact, nearly 90% of respondents anticipate construction materials prices to rise in 2019. That’s up from 86% in last year’s survey of BD+C readers.
See Also: And then there were two: HQ2 sites, in hindsight, seemed obvious
To help keep their project pipelines full through 2019, AEC firms are focusing on a number of business development strategies heading into this year. Selective hires (44.1%) and marketing/public relations efforts (42.2%) top the list, followed by investments in technology (39.0%), staff training/education (35.9%), and new services/business opportunities (29.2%).
Healthcare facilities and multifamily housing head the list of the hottest sectors heading into 2019, according to survey respondents. More than half (52.5%) indicated that the prospects for healthcare/hospital work were either “excellent” or “good” for 2019; 52.4% said the same for multifamily housing work. Other strong building sectors: senior/assisted living facilities (51.9%), office interiors/fitouts (46.9%), industrial/warehouse buildings (42.7%), hotel/hospitality developments (39.7%), university facilities (38.2%), government/military buildings (37.5%), and office buildings (37.4).
Related Stories
| Aug 11, 2010
Skanska completes $74 million Harbor Towers project six months ahead of schedule
Skanska USA Building Inc. announced the completion of a $74 million rehabilitation project at Harbor Towers, a 40-story luxury condominium complex comprising two towers located on Boston’s waterfront. Skanska served as Program Manager and oversaw the repair and replacement work that dramatically enhanced the reliability, cost-effectiveness, and energy efficiency of the buildings’ MEP systems.
| Aug 11, 2010
ASHRAE research targets tying together BIM and energy efficiency
Ensuring that a common language of “energy efficiency” is spoken by both building information modeling software used by architects and energy analysis and simulation software used by engineers is the goal of new research funded by ASHRAE.
| Aug 11, 2010
M&A deal volume down 67% in engineering/construction sector: PricewaterhouseCoopers
Global Economic Uncertainty Results in Sluggish Deal Activity in U.S.; China Shows Significant Opportunity for Growth
| Aug 11, 2010
New Watt Stopper emergency relay panel
Watt Stopper/Legrand has developed a new relay panel to provide fail-safe emergency lighting in a variety of commercial settings. The Emergency Relay Panel option is UL924 listed for use on emergency circuits. It is available as an option with Watt Stopper’s 24 or 48 relay size Lighting Integrator (LI) low voltage lighting control panels.
| Aug 11, 2010
Three Opus Corporation companies file for bankruptcy
Opus Corporation, a developer headquartered in Minnetonka, Minn., filed for bankruptcy in three of its five regional operating companies: Opus East, Opus South, and Opus West. CEO Mark Rauenhorst said sharp declines in commercial real estate values and tight credit markets caused difficulties in refinancing assets and restructuring lending agreements.
| Aug 11, 2010
ZweigWhite names its fastest-growing architecture, engineering, and environmental firms
Management consulting and research firm ZweigWhite has identified the 200 fastest-growing architecture, engineering, and environmental consulting firms in the U.S. and Canada for its annual ranking, The Zweig Letter Hot Firm List. This annual list features the design and environmental firms that have outperformed the economy and competitors to become industry leaders.
| Aug 11, 2010
'Too cold' and 'too hot' most common complaints among office workers, says IFMA study
The International Facility Management Association has released “Temperature Wars: Savings vs. Comfort,” a new study that takes an in-depth look at the most common thermal complaints made by workers and the variety of ways facility professionals respond to them.For many years, IFMA has surveyed facility professionals to learn the top office complaints among employees.
| Aug 11, 2010
SSOE, Fluor among nation's largest industrial building design firms
A ranking of the Top 75 Industrial Design Firms based on Building Design+Construction's 2009 Giants 300 survey. For more Giants 300 rankings, visit http://www.BDCnetwork.com/Giants