flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

2019 outlook: Firms not betting on another record-setting year

Building Team

2019 outlook: Firms not betting on another record-setting year

Despite the positive indicators for the market, AEC professionals remain largely cautious when it comes to growth prospects for 2019.


By David Barista, Editorial Director | January 7, 2019
Building under construction and by cranes

Courtesy Pixabay

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

| Nov 25, 2013

Insider tips on how to get picked a BD+C 40 Under 40 winner

We just posted the Entry Form for our 9th Annual BD+C "40 Under 40" competition. Frankly, the Entry Form is just the basic data. The real meat of your entry is your Personal Statement.

| Oct 18, 2013

Meet the winners of BD+C's $5,000 Vision U40 Competition

Fifteen teams competed last week in the first annual Vision U40 Competition at BD+C's Under 40 Leadership Summit in San Francisco. Here are the five winning teams, including the $3,000 grand prize honorees.

| Sep 30, 2013

Last chance! Three "scholarships" left for BD+C Under40 Leadership Summit

Free registration for selected "young superstars" for BD+C's Under40 Leadership Summit in San Francisco, Oct 9-11, 2013

| Sep 6, 2013

Public Architecture's Day Labor Station: Just the type of 'great idea' we're looking for in the $5,000 Vision U40 competition

Thinking about competing in BD+C's Vision U40 program at next month's U40 Leadership Summit? Here's a good example of the kind of "great idea" we're looking for. 

| Jul 11, 2013

InPro launches Palladium Wall Panels for lasting beauty in high-traffic environments

InPro Corporation® has forged a peace between designers who want elegant-looking walls and the facility crews who must maintain them. The company’s new Palladium™ Wall Panel System combines Edge Protectant Technology, or fully wrapped and bonded edges, with a balanced construction and Class-A Fire Rating to offer high-class looks without the high maintenance. 

Sponsored | | Jun 30, 2013

Get your 'Early Bird' entry in for BD+C 30th Annual Reconstruction Awards

The deadline is for BD+C's 30th Annual Reconstruction Awards is July 19, but if you get me a draft of your entry by July 12 (earlier if possible, please!), we'll read it and give you feedback and suggestions that could help you win. We'll give you enough time to rework your entry in time to meet the deadline. We do this "Early Bird" service to help you put together the best possible entry - one that will answer any questions our distinguished jury members may come up with. However, we must emphasize that the BD+C Reconstruction Awards program is a juried competition, so there are no guarantees you'll win. We're just trying to improve your odds. Building Design+Construction is the only publication in its field to recognize the importance of reconstruction in all its forms - historic preservation, adaptive reuse, renovation, fitouts, and reconstruction with addition. And we've been doing it for 30 years. Incidentally, reconstruction accounts for 30-35% of all revenue for AEC firms, so it's a key component of the US/Canada design and construction industry. Send your draft entry to: rcassidy@sgcmail.com. And good luck!

| Jun 18, 2013

Turner report: Activity in urban markets driving construction cost increases

Turner Construction Company announced that the Second Quarter 2013 Turner Building Cost Index – which measures costs in the non-residential building construction market in the United States – has increased to a value of 859. This reflects a 1.18% increase from the First Quarter 2013 and 4.00% yearly increase from the Second Quarter 2012.

| Jun 12, 2013

Sacred synergy achieves goals for religious education [2013 Building Team Award winner]

A renovation/addition project at Columbia Theological Seminary unites a historic residence hall with a modern classroom facility.

| Jun 11, 2013

Music/dance building supports sweet harmony [2013 Building Team Award winner]

A LEED Gold project enhances a busy Chicago neighborhood, meeting ambitious criteria for acoustical design and adaptability.

| Jun 11, 2013

Finnish elevator technology could facilitate supertall building design

KONE Corporation has announced a new elevator technology that could make it possible for supertall buildings to reach new heights by eliminating several problems of existing elevator technology. The firm's new UltraRope hoisting system uses a rope with a carbon-fiber core and high-friction coating, rather than conventional steel rope.

boombox1
boombox2
native1

More In Category




halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021