flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

AEC professionals cautiously optimistic about commercial construction in ’13

AEC professionals cautiously optimistic about commercial construction in ’13

Most economists say the U.S. is slowly emerging from the Great Recession, a view that was confirmed to some extent by an exclusive survey of 498 BD+C subscribers whose views we sought on the commercial construction industry’s outlook on business prospects for 2013.


By By Robert Cassidy | December 9, 2012
This article first appeared in the December 2012 issue of BD+C.

Most economists say the U.S. is slowly emerging from the Great Recession, a view that was confirmed to some extent by an exclusive survey of 498 BD+C subscribers whose views we sought on the commercial construction industry’s outlook on business prospects for 2013.

The majority (52.2%) of respondents—architects, engineers, contractors, buildings owners, and others in the commercial, industrial, and institutional field—said their firms were in at least “good” financial health, compared to 49.7% last year.

But a markedly strong showing (86.4%) said their firms would be up in revenues or would at least hold steady in 2013, versus 80.2% last year—an increase that may be not only statistically significant but also most certainly welcome for an industry that could use a bit of cheering.

As was the case last year, more than three-fourths of respondents (75.7%) rated “general economic conditions (i.e., recession)” as the most important concern their firms will face in 2013—roughly comparable to the 78.4% who responded that way last year.

Economy Remains Top Concern for ’13


                                                               2013            2012
General economic conditions                75.7%            78.4%
Competition from other firms                44.9%            40.1%
Managing cash flow                               37.6%            33.7%
Insufficient capital funding for projects 29.7%            34.5%
Softness in fees/bids                               29.7%            28.0%
Government regulations/restrictions       26.6%            23.0%
Price increases (e.g., materials, services)15.7%            18.1%
Avoiding layoffs                                      16.4%            14.3%
Keeping staff motivated                          14.3%            14.3%
Avoiding benefit reductions                    11.9%            12.5%

Other factors were largely within the same range as last year, given the margin of error (about 3.5-4%). Competition from other firms (44.9%) went up slightly (from 40.1% in 2011), while having insufficient capital funding for projects declined a bit, to 29.7%, from 34.5% the year before. For both years, nearly three in four (73.4% this year, 74.8% in 2011) described the current business situation for their firms as “very” to “intensely” competitive—further evidence that AEC firms are still struggling for every dollar.

HEALTHCARE, DATA CENTERS LOOK PROMISING FOR ’13

Respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale from “excellent” to “very weak.” (Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:

  • Healthcare continued to be the most highly rated sector, with nearly three-fifths of respondents (58.8%, vs. 54.6% last year) giving it a “good” to “excellent” rating.
  • Data centers and mission-critical facilities were also up, with the majority of respondents (52.1%) in the good/excellent category, compared to 45.2% last year
  • Senior and assisted-living facilities made a big jump, from last year’s 37.8% of respondents in the good/excellent category, to a majority this year, at 50.5%.
  • Government and military work was rated good to excellent by 36.1% of respondents, down slightly from last year’s 41.1%.
  • University/college facilities were rated good to excellent by 37.8% of respondents, versus 32.3% in 2011.
  • Retail commercial construction got a slight vote of confidence, with nearly one-fifth of respondents (19.9%) stating they thought their firms would have a good to excellent year, nearly double last year’s 11.1%.
  • Industrial and warehouse facilities might be staging a comeback: One-fourth (25.5%) of respondents whose firms engaged in that sector said they expect a good to excellent year in 2013; on the other hand, 35.8% said it would be weak or very weak.

Reconstruction—including historic preservation and renovations—accounted for at least 25% of work for more than a third (34.6%) of respondents’ firms, roughly the same as last year (36.3%). Office interiors and fitouts were down, with only 35.7% of this year’s respondents saying this sector would be good to excellent, compared to 42.7% last year.

The prospects for office buildings looked bleak, however, with only 15.6% saying that market would be good to excellent. The majority (55.2%) predicted office buildings would be “weak” or “very weak,” but that’s an improvement from 2011’s 67.3%.

The K-12 sector looked basically flat, with good/excellent responses from 22.9% of respondents this year, compared to 23.2% last year.

As for the use of building information modeling, one-fifth (20.2%) said their firm did not use BIM, about the same as in 2011 (20.6%). Of those who said their firms used BIM, a healthy 26.8% said BIM was used in the majority of projects, based on dollar value—precisely the same as last year. Only a few saw the use of BIM declining in the coming year. Nearly two-fifths (39.0%) of respondents said their companies would be beefing up their investments in technology.

On the communications front, nearly a third of respondents (32.9%) said they did not use social media. Of those who said they did, LinkedIn was the clear choice, at 85.1%, with Facebook in second place (49.5%) and Twitter bringing up the rear (21.1%).

Note: Of the 428 who gave their professional description, 42.1% were architects; 18.7%, engineers; 23.8%, contractors; 5.6% building owners, developers, or facility/property managers; and 9.8%, consultants or “other.” +

Related Stories

| Dec 23, 2013

First Look: KPF's dual-tower design for Ziraat Bank in Istanbul

Kohn Pedersen Fox Associates (KPF) is designing a new headquarters for Turkey’s largest and oldest financial institution, Ziraat Bank, in a modern, suburban district of Istanbul. 

| Dec 20, 2013

Must see for the holidays: Architects re-create iconic structures using gingerbread

Gensler, PBK, Page Sutherland Page, and Kirksey were among the firms to compete in the 5th Annual Gingerbread Build-Off.

| Dec 20, 2013

Can energy hogs still be considered efficient buildings? Yes, say engineers at Buro Happold

A new tool from the engineering firm Buro Happold takes into account both energy and economic performance of buildings for a true measure of efficiency. 

| Dec 18, 2013

How small architectural firms can make big money

What separates the great-but-struggling designers from the great-successful ones isn't luck. If you're as good an architect as you think, it will take more than your awesome design skills to become successful. Learn how to manage your firm’s finances and go from floundering to flourishing.

| Dec 18, 2013

Eskew + Dumez + Ripple receives AIA's 2014 Architecture Firm Award

 The American Institute of Architects (AIA) Board of Directors has voted for Eskew + Dumez + Ripple to receive the 2014 AIA Architecture Firm Award. The firm will be honored at the 2014 AIA National Convention in Chicago. The Board also voted to posthumously honor Julia Morgan, FAIA, with its 214 Gold Medal.

| Dec 18, 2013

Architecture Billings Index takes step back in November

After six months of steadily increasing demand for design services, the Architecture Billings Index paused in November, dipping below 50 for just the second time in 2013. 

| Dec 17, 2013

Kahn appoints Alan Cobb President and CEO

Cobb is the tenth president in the firm’s 118-year history. As President, Cobb is responsible for ensuring that all of the firm’s client issues are effectively address and that overall project team performance meets or exceeds client expectations for each and job the firm undertakes.

| Dec 17, 2013

CBRE's Chris Bodnar and Lee Asher named Healthcare Real Estate Executives of the Year

CBRE Group, Inc. announced today that two of its senior executives, Chris Bodnar and Lee Asher, have been named Healthcare Real Estate Executives of the Year by Healthcare Real Estate Insights.

| Dec 16, 2013

Is the metal building industry in a technology shift?

Automation is the future you can’t avoid, though you may try. Even within the metal building industry—which is made up of skilled tradesmen—automation has revolutionized, and will continue revolutionizing, how we work.

| Dec 16, 2013

Why employees don’t trust their leaders

Trust, one of the key elements to productive business relationships, is in short supply these days. An Associated Press-GfK poll discovered that only one-third of Americans say most people can be trusted and nearly two-thirds says “you can’t be too careful” in dealing with people.

boombox1
boombox2
native1

More In Category

Warehouses

California bill would limit where distribution centers can be built

A bill that passed the California legislature would limit where distribution centers can be located and impose other rules aimed at reducing air pollution and traffic. Assembly Bill 98 would tighten building standards for new warehouses and ban heavy diesel truck traffic next to sensitive sites including homes, schools, parks and nursing homes.




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