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
Transportation & Parking Facilities | Feb 11, 2015
11 of the nation’s best ‘Complete Streets’ policies of 2014
Austin, Texas, and Troy, N.Y., are among the cities with the strongest safe streets policies, according to a new report.
Sponsored | Roofing | Feb 11, 2015
New school blends with local architecture using Petersen metal roof
Perkins Eastman in Stamford, Conn., designed the school to emphasize and integrate the International Baccalaureate curriculum throughout.
Mixed-Use | Feb 11, 2015
Developer plans to turn Eero Saarinen's Bell Labs HQ into New Urbanist town center
Designed by Eero Saarinen in the late 1950s, the two-million-sf, steel-and-glass building was one of the best-funded and successful corporate research laboratories in the world.
Steel Buildings | Feb 10, 2015
Korean researchers discover 'super steel'
The new alloy makes steel as strong as titanium.
Museums | Feb 9, 2015
Herzog & de Meuron's M+ museum begins construction in Hong Kong
When completed, M+ will be one of the first buildings in the Foster + Partners-planned West Kowloon Cultural District.
Contractors | Feb 9, 2015
Construction firms reach highest employment total since February 2009
Construction employers added 39,000 jobs in January and 308,000 over the past year, reaching the highest employment total since February 2009.
Warehouses | Feb 5, 2015
Self storage facility designed to blend in with Miami Beach's party scene
The plans by architect Gutierrez & Lozano are of a sleek, boutique-looking, 22,500-sf facility at the gateway to the city.
Sponsored | Designers | Feb 5, 2015
3D printing has people in the building and construction industry talking
How can 3D printing affect the building design and construction industry?
Transit Facilities | Feb 4, 2015
London mayor approves plan for a bicycle highway
The plan will guarantee bike riders a designated stretch of street to ride from east to west through the city.
Sports and Recreational Facilities | Feb 4, 2015
Arup unveils plans for the new A.C. Milan stadium
The venue will include a modern stage for the home matches together with a hotel, sports college, restaurants, children’s playground, green areas, and spaces open to the city and dedicated to public use.