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
Architects | Apr 6, 2023
Design for belonging: An introduction to inclusive design
The foundation of modern, formalized inclusive design can be traced back to the Americans with Disabilities Act (ADA) in 1990. The movement has developed beyond the simple rules outlined by ADA regulations resulting in features like mothers’ rooms, prayer rooms, and inclusive restrooms.
Market Data | Apr 6, 2023
JLL’s 2023 Construction Outlook foresees growth tempered by cost increases
The easing of supply chain snags for some product categories, and the dispensing with global COVID measures, have returned the North American construction sector to a sense of normal. However, that return is proving to be complicated, with the construction industry remaining exceptionally busy at a time when labor and materials cost inflation continues to put pricing pressure on projects, leading to caution in anticipation of a possible downturn. That’s the prognosis of JLL’s just-released 2023 U.S. and Canada Construction Outlook.
Cladding and Facade Systems | Apr 5, 2023
Façade innovation: University of Stuttgart tests a ‘saturated building skin’ for lessening heat islands
HydroSKIN is a façade made with textiles that stores rainwater and uses it later to cool hot building exteriors. The façade innovation consists of an external, multilayered 3D textile that acts as a water collector and evaporator.
Market Data | Apr 4, 2023
Nonresidential construction spending up 0.4% in February 2023
National nonresidential construction spending increased 0.4% in February, according to an Associated Builders and Contractors analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $982.2 billion for the month, up 16.8% from the previous year.
Sustainability | Apr 4, 2023
ASHRAE releases Building Performance Standards Guide
Building Performance Standards (BPS): A Technical Resource Guide was created to provide a technical basis for policymakers, building owners, practitioners and other stakeholders interested in developing and implementing a BPS policy. The publication is the first in a series of seven guidebooks by ASHRAE on building decarbonization.
Sustainability | Apr 4, 2023
NIBS report: Decarbonizing the U.S. building sector will require massive, coordinated effort
Decarbonizing the building sector will require a massive, strategic, and coordinated effort by the public and private sectors, according to a report by the National Institute of Building Sciences (NIBS).
Education Facilities | Apr 3, 2023
Oklahoma’s Francis Tuttle Technology Center opens academic center for affordable education and training
Oklahoma’s Francis Tuttle Technology Center, which provides career-specific training to adults and high school students, has completed its Francis Tuttle Danforth Campus—a two-story, 155,000-sf academic building. The project aims to fill the growing community’s rising demand for affordable education and training.
Sports and Recreational Facilities | Mar 30, 2023
New University of St. Thomas sports arena will support school's move to Division I athletics
The University of St. Thomas in Saint Paul, Minn., last year became the first Division III institution in the modern NCAA to transition directly to Division I. Plans for a new multipurpose sports arena on campus will support that move.
Warehouses | Mar 29, 2023
Construction completed on Canada’s first multi-story distribution center
Construction was recently completed on Canada’s first major multi-story industrial project, a distribution center in Burnaby, British Columbia. The project provides infrastructure for last-mile delivery in a world where consumers have come to expect next-day and same-day delivery, according to Ware Malcomb, the project's architect of record.
AEC Innovators | Mar 27, 2023
Leading architecture, engineering firm HED appoints new co-CEOs
As children of immigrant families, Van Herle and Suarez will bring a diverse perspective into a historically underrepresented industry and advance the firm’s mission of creating a positive impact for clients, communities, and the world.
