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
Courtyard connects new and remodeled schools
Good Fulton & Farrell Architects of Dallas designed a major expansion and renovation at the Dallas Academy in Texas. The 22,900-sf addition serves as the school’s new front door and includes a library, student assembly area, cafeteria, seven classrooms, and administrative offices. The school’s existing 14,560-sf building was renovated to accommodate a lower school component, and...
| Aug 11, 2010
Baltimore gets new youth detention center
PSA-Dewberry is designing Baltimore’s $80 million downtown youth detention center. The five-story, 200,000-sf center will house youths who have been criminally charged as adults, and is the first phase of Maryland’s seven-phase plan to completely reconstruct the city’s downtown correctional campus.
| Aug 11, 2010
Rehabilitation center helps patients transition
Construction is under way on the Polytrauma Transitional Rehabilitation Center on the VA Medical Center campus in Richmond, Va. The $8 million, 22,000-sf facility will provide physical therapy, housing, and education to veterans as part of their transition back into their communities. The center was designed by HDR, Alexandria, Va.
| Aug 11, 2010
Community college’s hillside learning center
The Earl E. and Dorothy J. Dellinger Learning Resource Center at Southwest Virginia Community College in Richlands, Va., is the centerpiece of this mountainside school. Designed by Arlington, Va.-based The Lukmire Partnership, the 50,000-sf, two-story building connects the upper and lower campuses, which are separated by a 70-foot vertical grade change.
| Aug 11, 2010
Triangular tower targets travelers
Chicago-based Goettsch Partners is designing a new mixed-use high-rise for the Chinese city of Dalian, located on the Yellow Sea coast. Developed by Hong Kong-based China Resources Land Limited, the tower will have almost 1.1 million sf, which includes a 377-room Grand Hyatt hotel, 84 apartments, three restaurants, banquet space, and a spa and fitness center.
| Aug 11, 2010
Spa resort in harmony with mountain setting
The Sparkling Hill Resort and Wellness Hotel in Vernon, B.C., looks as if it was chiseled out of bedrock and jutting from the mountainside. Designed by the Victoria, B.C., office of Cannon Design, the 240,000-sf resort has 152 guest rooms with floor-to-ceiling windows and spa-like bathrooms, as well as a signature 20,000-sf whole-body wellness spa with treatment rooms designed to feel like they...
| Aug 11, 2010
Expanding retail complex is LEED pre-certified
The Promenade at Coconut Creek in Broward County, Fla., a live-work-play shopping and lifestyle center, is being expanded by 105,000 sf. When phase II of the 335,000-sf project is complete, the facility will house 75 retailers, restaurants, and related services, making it one of the largest mixed-use projects in northern Broward County.
| Aug 11, 2010
Thom Mayne unveils ‘floating cube’ design for the Perot Museum of Nature and Science
Calling it a “living educational tool featuring architecture inspired by nature and science,” Pritzker Prize Laureate Thom Mayne unveiled the schematic designs and building model for the Perot Museum of Nature & Science at Victory Park in Dallas. The $185 million, 180,000-sf structure is 170 feet tall—equivalent to approximately 14 stories—and is conceived as a large...
| Aug 11, 2010
Medical office building planned in Fort Worth, Texas
Dallas-based TGS Architects has unveiled its design for the five-story, 130,000-sf Plaza Medical Office Building, planned for Fort Worth, Texas. The Class A development will include space for orthopedic care, surgery, breast center, diagnostic imaging, cardiovascular, and rehabilitation therapy services.
| Aug 11, 2010
Recession hits office sector
The office vacancy rate plunged by 0.9% to 18.4% during the spring, and rental rates fell to levels more than 7% below those seen last year, according to BD+C Economist Jim Haughey. A number of large office markets, such as New York and San Francisco, saw vacancy levels reach 20%. Overall, net space rentals fell during the spring in every major office market except Pittsburgh.
