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
Building Team | Jan 3, 2017
How does your firm’s hit rate stack up to the AEC competition?
If your firm is not converting at least a third of project proposals when competing for new work, it may be time to reassess your marketing tactics and processes.
Building Team | Dec 30, 2016
An open letter to the AEC C-suite
Women AEC professionals need you to take action.
Building Team | Dec 14, 2016
Hackathons set the stage at events for women in AEC and BD+C Under-40s
Popular among engineers, hackathons are forums that encourage “constructive collision” by bringing people into a room, letting them self-organize around common interests and goals, and having them work together in groups over two or three consecutive days to devise workable inventions that fill identifiable needs.
Building Team | Dec 14, 2016
Will Trump-led America be a boon or bust for U.S. AEC firms?
Regardless of which side of the aisle you stand on, election night was a jaw-dropping moment.
Building Team | Dec 8, 2016
The NYC Public Design Commission recognizes 12 projects with its 2016 Excellence in Design Award
2016 marked the 34th year the Public Design Commission has handed out its Excellence in Design Awards.
Building Team | Dec 2, 2016
Alexandria Real Estate Equities becomes first real estate investment trust to be named a First-in-Class Fitwel Champion
Fitwel building certification was developed to foster positive impacts on building occupant health and productivity through improvements to workplace design and policies.
Building Team | Nov 15, 2016
Major architecture firms are flocking to Dubai’s Design District
Three more major firms are making a permanent home in Dubai.
Architects | Nov 11, 2016
Six finalists selected for London’s Illuminated River competition
The competition is searching for the best design for lighting the bridges of central London.
Building Team | Nov 7, 2016
Taking cues from nature: How biomimicry can drive ROI for hoteliers
Biomimicry takes inspiration from nature’s form, processes, and ecosystems to solve human problems. This design method, which incorporates lessons learned from nature, can constantly morph in response to new challenges in our environments, writes Gensler's Lorraine Francis.
Building Team | Nov 2, 2016
AIA 'I Look Up Film Challenge' People's Choice Award revealed
Top films address accessibility for the disabled, 18th century urban planning, and a recycling facility that does more than repurpose material.
