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
New pavilion planned for famous boulevard
Located in a prime spot along Santa Monica Boulevard in the Westwood neighborhood of Los Angeles, the Santa Monica Pavilion will have 9,000 sf of retail space, 35,500 sf of office space, and two below-grade parking levels when it opens in late 2010. The $10 million, three-story building extends a full length of the block to create a window wall of blue-gray translucent, fritted glass panels ove...
| Aug 11, 2010
Luxury high-rise meets major milestone
A topping off ceremony was held in late October for 400 Fifth Avenue, a 57,000-sf high-rise that includes a 214-room luxury hotel and 190 high-end residential condominiums. Developed by Bizzi & Partners Development and designed by Gwathmey Siegel & Associates Architects, the 60-story tower in midtown Manhattan sits atop a smaller-scale 10-story base, which creates a street façade t...
| Aug 11, 2010
MOB added to new hospital project
A late-2009 ground breaking is planned for a $20 million medical office building on the grounds of the $211 million, 106-bed Loma Linda University Medical Center in Murrieta, Calif., which itself is under construction. Minneapolis-based Frauenshuh HealthCare Real Estate Solutions is developing the five-story, 160,000-sf MOB, which will accommodate 60 physician offices.
| Aug 11, 2010
Firm goes for Gold with office design
DLR Group is designing its new Omaha, Neb., headquarters to achieve LEED Gold. Sustainable features being incorporated into the three-story, 39,000-sf building, which is part of the city’s new Aksarben Village mixed-use development, include daylighting, outdoor workspaces, native landscaping, a green roof, and the pursuit of renewable energy credits.
| Aug 11, 2010
New building focuses on public safety
The $40 million public safety building for the city of El Cajon, Calif., is under construction and slated for completion in June 2011. The five-story, 119,400-sf building will house the city’s administrative offices, a joint police and fire emergency operations center, central data center, indoor firing range, crime lab, and short-term custody facility.
| Aug 11, 2010
BU students move into high-rise dorm
Boston University’s newest residential building rises 26 stories above the Charles River. Part of the school’s 10-acre John Hancock Student Village, the 396,000-sf tower houses 962 students and has three apartments for faculty use. The tower also has a large multipurpose room on the top floor.
| Aug 11, 2010
Mixed-use Seattle high-rise earns LEED Gold
Seattle’s 2201 Westlake development became the city’s first mixed-use and high-rise residential project to earn LEED Gold. Located in Seattle’s South Lake Union neighborhood, the newly completed 450,000-sf complex includes 300,000 sf of Class A office space, 135 luxury condominiums (known as Enso), and 25,000 sf of retail space.
| Aug 11, 2010
Theater offers spectacular views inside and out
A 500-seat proscenium theater sits at the heart of the 35,000-sf Performing Arts Pavilion at the Jackson Hole Center for the Arts. The entertainment and cultural facility, designed by Stephen Dynia Architects, Jackson Hole, Wyo., also houses glass-walled rehearsal rooms that offer passersby views of the activity going on inside and multifunction lobby with views of Snow King Mountain.
| Aug 11, 2010
Corporate campus gets LEED stamp of Gold
The new 100,000-sf corporate headquarters for The Thornburg Companies in Santa Fe, N.M., earned LEED Gold. Designed in the “new-old Santa Fe style” by Legorreta + Legorreta, with local firms Dekker/Perich/Sabatini and Klinger Constructors on the Building Team, the green building sits on seven acres and features three distinct but interconnected office spaces with two courtyards and ...
| Aug 11, 2010
Expansion of chemistry facility no experiment
A September ground breaking at Wayne State University in Detroit puts the school’s A. Paul Schaap Chemistry Building and Lecture Hall on track for a December 2010 completion. The $37 million, 96,000-sf facility is the second phase of a two-phase project to expand and renovate the existing chemistry building.