The market outlook is brighter for U.S. architecture, engineering, and construction companies, with a majority of AEC firms reporting higher revenues, strong forecasts, and sound financial health, according to Building Design+Construction’s fourth annual Market Forecast Survey.
More than half (54.4%) of the 342 AEC professionals who responded to the survey reported that revenues had increased at their firms this year, and nearly two-thirds (63.4%) are forecasting revenue growth for 2015. This represents a sizable uptick from BD+C’s 2013 market forecast survey, in which 46.1% of respondents reported higher revenue for the year and 56.8% predicted growth for 2014.
Asked to rate their firms’ overall financial health, almost three-quarters (72.6%) responded either “good” (50.4%) or “very good” (22.2%), compared to just 55.5% in last year’s survey. Only 8.8% indicated that their firm is in a weakened state financially.
Firms are looking to sustain growth during the next two years through a variety of business development strategies, including strategic hires (48.8% rated it as a top tactic for growth), strengthened marketing/public relations efforts (46.2%), more staff training and education (41.9%), technology upgrades (41.9%), and launching a new service or business opportunity (33.4%).
Top concerns heading into 2015: general economic conditions (54.9% ranked it as a top concern), competition from other firms (47.7%), managing cash flow (29.4%), price increases in materials/services (28.8%), government regulations/restrictions (26.5%), and insufficient capital funding for projects (23.8%).
Healthcare keeps chugging, multifamily moves up
Survey respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale, from “excellent” to “very weak.” (Note: Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:
• For the second consecutive year, the healthcare sector ranked as one of the most active building sectors, with nearly two-thirds of respondents (63.6%) in the good/excellent category, compared to 62.5% in 2013 and 58.8% the previous year.
• Multifamily saw a nice bump in activity over last year, thanks primarily to the nation’s continued rental housing boom. More than six in 10 respondents (62.3%) gave the sector a good or excellent rating, up from 56.1% in the 2013 survey.
• As more Baby Boomers leave the workforce and enter their retirement years, the demand for senior and assisted living facilities is expected to spike. This trend is reflected in the survey results, with 59.2% of respondents indicating good/excellent prospects for this sector in 2015—down a bit from the 2013 survey (66.0%), but up strongly from the previous year (50.5%).
• The data center sector continues to be a powerhouse market for AEC firms, as data center providers, corporations, institutions, and government agencies rush to keep pace with the boom in mobile and cloud computing. The majority of respondents (58.2%) had either good or excellent prospects for the sector in 2015, up from 56.0% in 2013 and 45.2% the year before.
• The industrial/warehouse and office building sectors saw the largest year-over-year jump in activity among the respondent firms. Nearly half (43.3%) ranked the industrial sector in the good/excellent category, up from 33.0% last year, while 35.4% said they were upbeat about the office sector, versus 26.9% the previous year.
• Other sectors with sizable YoY percentage growth: retail (up 6.5 points, to 37.9%), multifamily (up 6.2 points, to 62.3%), K-12 schools (up 5.9 points, to 36.8%), and office interiors/fitouts (up 5.6 points, to 57.7%). The senior/assisted living sector was the only market to see a significant YoY percentage decline, but it still ranked as one of the industry’s most active sectors, according to the survey.
Uptick in BIM/VDC adoption
Following three years of relatively stagnant growth in the adoption of BIM/VDC software tools among BD+C readers, this segment saw modest growth in 2014. Eighty percent of respondents said their firm uses BIM/VDC tools on at least some of their projects, up slightly from 77.3% in the 2013 survey. The number of BIM power users increased, as well: 17.3% indicated that their firm uses BIM on more than 75% of projects, up from 12.2% last year.
The respondent breakdown by profession: architect/designer (45.3%), contractor (19.0%), engineer (16.7%), owner/developer (7.0%), consultant (4.1%), facility manager (3.8%), other (4.1%).
Related Stories
| Apr 5, 2011
Zaha Hadid’s civic center design divides California city
Architect Zaha Hadid is in high demand these days, designing projects in Hong Kong, Milan, and Seoul, not to mention the London Aquatics Center, the swimming arena for the 2012 Olympics. But one of the firm’s smaller clients, the city of Elk Grove, Calif., recently conjured far different kinds of aquatic life when members of the City Council and the public chose words like “squid,” “octopus,” and “starfish” to describe the latest renderings for a proposed civic center.
| Apr 5, 2011
Are architects falling behind on BIM?
A study by the National Building Specification arm of RIBA Enterprises showed that 43% of architects and others in the industry had still not heard of BIM, let alone started using it. It also found that of the 13% of respondents who were using BIM only a third thought they would be using it for most of their projects in a year’s time.
| Apr 5, 2011
Top 10 Buildings: Women in Architecture
Making selections of top buildings this week led to a surprising discovery about the representation of women in architecture, writes Tom Mallory, COO and co-founder, OpenBuildings.com. He discovered that finding female-created architecture, when excluding husband/wife teams, is extremely difficult and often the only work he came across was akin to interior design.
| Apr 5, 2011
What do Chengdu, Lagos, and Chicago have in common?
They’re all “world middleweight cities” that are likely to become regional megacities (10 million people) by 2025—along with Dongguan, Guangzhou, Hangzhou, Shenzhen, Tianjin, and Wuhan (China); Kinshasa (Democratic Republic of the Congo); Jakarta (Indonesia); Lahore (Pakistan); and Chennai (India), according to a new report from McKinsey Global Institute: “Urban World: Mapping the economic power of cities”.
