Median A/E firm operating profit margins on net revenue (before incentive/bonus payments and taxes) have been on a steady rise in recent years, reaching a six-year high of 14.3% this year, according to business consulting firm PSMJ Resources’ 2015 A/E Financial Performance Benchmark Survey Report.
After posting all-time highs in 2007 and remaining stable in 2008, profit margins started to decline significantly beginning in 2009, due to the severe downturn in the economy. But, median profit margins on net revenue have been on the upswing in the past three years, hitting 11.4% and 13.0% in the 2013 and 2014 surveys, respectively—which, along with the 2015 data, supports the notion that backlogs are filling back up.
“It is certainly encouraging to see profit margins trending upward. But, there is another side to this coin. Just because the median has reached 14.3%, that doesn’t mean it should be an acceptable profit margin at all for an A/E firm,” says Frank A. Stasiowski, FAIA, Founder and CEO of PSMJ Resources. “There are plenty of A/E firms that can and do deliver profit margins far higher than this. These are the firm leaders who are able to really think differently—about project delivery, about marketing strategy, about value. Deliver a higher value and you can command higher fees…and yield higher profits.”
With data from 328 A/E firms across the United States and Canada, the 2015 PSMJ A/E Financial Performance Benchmark Survey Report is the go-to industry resource for firms wanting to increase cash flow, lower overhead, and improve overall financial results. Now in its 35th edition, the comprehensive report provides the most valuable research and insight available for making critical decisions that impact the success of a firm.
Related Stories
| Jan 26, 2012
Siemens launches smoke detection knowledge center
New knowledge center web site demonstrates efficacy of smoke detection.
| Jan 26, 2012
Hendrick Construction completes Osso Restaurant in Charlotte
Designed by François Fossard, Osso's upscale interior includes tapered, twisted decorative columns and an elegant fireplace in the center of the lounge.
| Jan 26, 2012
HOK partners with USGBC on design of Haiti children's center
Passive design principles give form to a sustainable, restorative environment for the children of Haiti.
| Jan 26, 2012
American Standard names Gould as president and CEO
Gould succeeds Don Devine, who led the successful turnaround of American Standard Brands.
| Jan 26, 2012
Summit Design+Build completes law office in Chicago
Applegate & Thorne-Thomsen's new office suite features private offices, open office area, conference rooms, reception area, exposed wood beams and columns, and exposed brick.
| Jan 24, 2012
New iPad app ready for prime time
Siemens’ versatile application connects users to APOGEE BAS control and monitoring functions via wireless network connectivity. The application directly interacts with BACnet/IP and Siemens APOGEE P2 field panels.
| Jan 24, 2012
Vyhanek joins Thornton Tomasetti’s Kansas City office
Vyhanek will assemble a new MEP team in the Midwest to support Building Performance and Property Loss Consulting practices.
| Jan 24, 2012
U of M installs new lighting at Crisler Player Development Center
Energy efficient lighting installed at PDC reduce costs and improves player performance.
| Jan 24, 2012
Rockingham County Judicial Center receives USGBC Gold NC v.2.2
The Rockingham facility is the first judicial center in North Carolina to seek certification from the U.S. Green Building Council’s LEED Building rating system.
| Jan 19, 2012
LEED puts the 'Gold' in Riverside golden arches
McDonald's restaurant recognized for significant energy savings.
