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
Cost of HVAC equipment to remain flat in 2009, says Turner
While some manufacturers have announced slight increases in facilities equipment pricing for 2009, the average cost of equipment is expected to remain flat in 2009, according to the 2009 Turner Logistics Equipment Cost Index. However, equipment pricing could face increased pressure if there is a further decline in market demand.
| Aug 11, 2010
CityCenter projects get LEED Gold
MGM Mirage and Infinity World Development have received LEED Gold certification for the first three CityCenter projects: the ARIA Resort hotel tower, ARIA Resort convention center and theater, and the Vdara Hotel (above). The CityCenter developers anticipate Gold or Silver LEED certification for the project's remaining developments, which include a Mandarin Oriental hotel, a 500,000-sf retail a...
| Aug 11, 2010
BIG beats out Foster and Hadid in design competition for Kazakhstan's National Library
Invited as one of five pre-selected architect-led teams that included Lord Norman Foster and Zaha Hadid, Copenhagen-based BIG was awarded first prize in an international design competition for the new National Library in Astana, Kazakhstan. The 33,000-square-meter facility will be organized as a “circular loop of knowledge” that allows for clear, intuitive orientation of the vast co...
| Aug 11, 2010
Connecticut high school gets a expansion and renovation
The Morganti Group, Danbury, Conn., is managing the construction of a $41 million addition and renovation project at Newtown (Conn.) High School. Designed by Fletcher Thompson, Shelton, Conn., the project consists of a 70,000-sf addition and 30,000 sf of renovations to the gymnasium and interior spaces.
| Aug 11, 2010
Philadelphia cancer center seeks LEED certification
The New York office of Thornton Tomasetti provided structural engineering services for the Ruth and Raymond Perelman Center for Advanced Medicine in Philadelphia, a $232 million medical research center and advanced treatment center for cancer and cardiovascular disease. Designed by a joint venture of Perkins Eastman Architects and Rafael Vinõly Architects, the 340,000-sf facility will hous...
| Aug 11, 2010
Broadway-style theater headed to Kentucky
One of Kentucky's largest performing arts venues should open in 2011—that's when construction is expected to wrap up on Eastern Kentucky University's Business & Technology Center for Performing Arts. The 93,000-sf Broadway-caliber theater will seat 2,000 audience members and have a 60×24-foot stage proscenium and a fly loft.
| Aug 11, 2010
Office developer offers prebuilt units
Metropole Realty Advisors, owner and developer of the newly renovated 681 Fifth Avenue office building in Manhattan's Plaza District, has created a 6,000-sf, full-floor prebuilt unit that functions as both a model unit and built space for tenants unwilling to incur the cost of a build out. Designed by MKDA Designs, the space features contemporary finishes, 14-foot ceilings, and warm, neutral to...
| Aug 11, 2010
Citizenship building in Texas targets LEED Silver
The Department of Homeland Security's new U.S. Citizenship and Immigration Services facility in Irving, Texas, was designed by 4240 Architecture and developed by JDL Castle Corporation. The focal point of the two-story, 56,000-sf building is the double-height, glass-walled Ceremony Room where new citizens take the oath.
| Aug 11, 2010
Brooklyn's tallest building reaches 514 feet
With the Brooklyner now topped off, the 514-foot-high apartment tower is Brooklyn's tallest building. Designed by New York-based Gerner Kronick + Valcarcel Architects and developed by The Clarett Group, the soaring 51-story tower is constructed of cast-in-place concrete and clad with window walls and decorative metal panels.
