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
Alabama hospital gets a four-story addition
Birmingham, Ala.-based Hoar Construction has completed the North Tower addition at Thomas Hospital in Fairhope, Ala. The four-story, 123,000-sf addition accommodates an ER on the first floor, 32 private patient rooms and nursing support on the second and third floors, and room for 32 planned patient rooms on the top floor.
| Aug 11, 2010
Florida mixed-use complex includes retail, residential
The $325 million Atlantic Plaza II lifestyle center will be built on 8.5 acres in Delray Beach, Fla. Designed by Vander Ploeg & Associates, Boca Raton, the complex will include six buildings ranging from three to five stories and have 182,000 sf of restaurant and retail space. An additional 106,000 sf of Class A office space and a residential component including 197 apartments, townhouses, ...
| Aug 11, 2010
Florida International University's cantilevered design
Suffolk Construction's Miami-Dade business unit is serving as GC for the $14 million School of International and Public Affairs building at the University Park Campus of Florida International University. Designed by Arquitectonica, Miami, the five-story, 58,408-sf building will have a café and three auditoriums on the ground level; the largest auditorium will have a 40-foot cantilever abov...
| Aug 11, 2010
Restoration gives new life to New Formalism icon
The $30 million upgrade, restoration, and expansion of the Mark Taper Forum in Los Angeles was completed by the team of Rios Clementi Hale Studios (architect), Harley Ellis Devereaux (executive architect/MEP), KPFF (structural engineer), and Taisei Construction (GC). Work on the Welton Becket-designed 1967 complex included an overhaul of the auditorium, lighting, and acoustics.
| Aug 11, 2010
Construction material prices drop slightly in April, extending the decline
The construction materials price index for nonresidential buildings fell 0.3% in April extending the decline since the September index peak to 13.1%. Prices for the mix of materials used in nonresidential construction prices are back to the December 2007 level before the 14% jump in prices from March through September.
| Aug 11, 2010
Research Facility Breaks the Mold
In the market for state-of-the-art biomedical research space in Boston's Longwood Medical Area? Good news: there are still two floors available in the Center for Life Science | Boston, a multi-tenant, speculative high-rise research building designed by Tsoi/Kobus & Associates, Boston, and developed by Lyme Properties, Hanover, N.
| Aug 11, 2010
Piano's 'Flying Carpet'
Italian architect Renzo Piano refers to his $294 million, 264,000-sf Modern Wing of the Art Institute of Chicago as a “temple of light.” That's all well and good, but how did Piano and the engineers from London-based Arup create an almost entirely naturally lit interior while still protecting the priceless works of art in the Institute's third-floor galleries from dangerous ultravio...
| Aug 11, 2010
Precast All the Way
For years, precast concrete has been viewed as a mass-produced product with no personality or visual appeal—the vanilla of building materials. Thanks to recent technological innovations in precast molds and thin veneers, however, that image is changing. As precast—concrete building components that are poured and molded offsite—continues to develop a vibrant personality all it...
| Aug 11, 2010
Bronze Award: John G. Shedd Aquarium, Chicago, Ill.
To complete the $55 million renovation of the historic John G. Shedd Aquarium in the allotted 17-month schedule, the Building Team had to move fast to renovate and update exhibit and back-of-house maintenance spaces, expand the visitor group holding area, upgrade the mechanical systems, and construct a single-story steel structure on top of the existing oceanarium to accommodate staff office sp...
| Aug 11, 2010
AIA Course: Building with concrete – Design and construction techniques
Concrete maintains a special reputation for strength, durability, flexibility, and sustainability. These associations and a host of other factors have made it one of the most widely used building materials globally in just one century. Take this free AIA/CES course from Building Design+Construction and earn 1.0 AIA learning unit.