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
Giants 400 | Sep 18, 2023
Top 200 Office Building Architecture Firms for 2023
Gensler, Stantec, HOK, and Interior Architects top BD+C's ranking of the nation's largest office building sector architecture and architecture/engineering (AE) firms for 2023, as reported in Building Design+Construction's 2023 Giants 400 Report. Note: This ranking includes revenue for all office building work, including core and shell projects and workplace/interior fitouts.
Resort Design | Sep 18, 2023
Luxury resort provides new housing community for its employees
The Wisteria community will feature a slew of exclusive amenities, including a market, pub, and fitness center, in addition to 33 new patio homes.
Life of an Architect Podcast | Sep 18, 2023
Life of an Architect Podcast Ep. 134: Management 101
It happens to most people eventually. Some get there quickly, while others take a bit longer. Transitioning into a management role is a natural evolution of skill development, but that doesn’t necessarily make it any easier. Chances are you’re ready for management, but in case you’ve questions, we think we have answers.
Hotel Facilities | Sep 15, 2023
The next phase of sustainability in luxury hotels
The luxury hotel market has seen an increase in green-minded guests looking for opportunities to support businesses that are conscientious of the environment.
Adaptive Reuse | Sep 15, 2023
Salt Lake City’s Frank E. Moss U.S. Courthouse will transform into a modern workplace for federal agencies
In downtown Salt Lake City, the Frank E. Moss U.S. Courthouse is being transformed into a modern workplace for about a dozen federal agencies. By providing offices for agencies previously housed elsewhere, the adaptive reuse project is expected to realize an annual savings for the federal government of up to $6 million in lease costs.
Data Centers | Sep 15, 2023
Power constraints are restricting data center market growth
There is record global demand for new data centers, but availability of power is hampering market growth. That’s one of the key findings from a new CBRE report: Global Data Center Trends 2023.
Engineers | Sep 15, 2023
NIST investigation of Champlain Towers South collapse indicates no sinkhole
Investigators from the National Institute of Standards and Technology (NIST) say they have found no evidence of underground voids on the site of the Champlain Towers South collapse, according to a new NIST report. The team of investigators have studied the site’s subsurface conditions to determine if sinkholes or excessive settling of the pile foundations might have caused the collapse.
Office Buildings | Sep 14, 2023
New York office revamp by Kohn Pedersen Fox features new façade raising occupant comfort, reducing energy use
The modernization of a mid-century Midtown Manhattan office tower features a new façade intended to improve occupant comfort and reduce energy consumption. The building, at 666 Fifth Avenue, was originally designed by Carson & Lundin. First opened in November 1957 when it was considered cutting-edge, the original façade of the 500-foot-tall modernist skyscraper was highly inefficient by today’s energy efficiency standards.
Healthcare Facilities | Sep 13, 2023
Florida’s first freestanding academic medical behavioral health hospital breaks ground in Tampa Bay
Construction kicked off recently on TGH Behavioral Health Hospital, Florida’s first freestanding academic medical behavioral health hospital. The joint venture partnership between Tampa General (a 1,040-bed facility) and Lifepoint Behavioral Health will provide a full range of inpatient and outpatient care in specialized units for pediatrics, adolescents, adults, and geriatrics, and fills a glaring medical need in the area.
Adaptive Reuse | Sep 13, 2023
Houston's first innovation district is established using adaptive reuse
Gensler's Vince Flickinger shares the firm's adaptive reuse of a Houston, Texas, department store-turned innovation hub.