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
| Oct 11, 2010
Rhode Island is the first state to adopt IGCC
Rhode Island is the first state to adopt the International Green Construction Code (IGCC). The Rhode Island Green Buildings Act identifies the IGCC as an equivalent standard in compliance with requirements that all public agency major facility projects be designed and constructed as green buildings. The Rules and Regulations to implement the Act take effect in October 2010.
| Oct 8, 2010
Union Bank’S San Diego HQ awarded LEED Gold
Union Bank’s San Diego headquarters building located at 530 B Street has been awarded LEED Gold certification from the Green Building Certification Institute under the standards established by the U.S. Green Building Council. Gold status was awarded to six buildings across the United States in the most recent certification and Union Bank’s San Diego headquarters building is one of only two in California.
| Oct 6, 2010
Windows Keep Green Goals in View
The DOE's National Renewable Energy Laboratory has almost 600 window openings, and yet it's targeting LEED Platinum, net-zero energy use, and 50% improvement over ASHRAE 90.1. How the window ‘problem’ is part of the solution.
| Oct 6, 2010
From grocery store to culinary school
A former West Philadelphia supermarket is moving up the food chain, transitioning from grocery store to the Center for Culinary Enterprise, a business culinary training school.
| Sep 30, 2010
Luxury hotels lead industry in green accommodations
Results from the American Hotel & Lodging Association’s 2010 Lodging Survey showed that luxury and upper-upscale hotels are most likely to feature green amenities and earn green certifications. Results were tallied from 8,800 respondents, for a very respectable 18% response rate. Questions focused on 14 green-related categories, including allergy-free rooms, water-saving programs, energy management systems, recycling programs, green certification, and green renovation.
| Sep 22, 2010
Michael Van Valkenburg Assoc. wins St. Louis Gateway Arch design competition
Landscape architect Michael Van Valkenburgh and a multidisciplinary team of experts in “urban renewal, preservation, commemoration, social connections and ecological restoration” have been picked for the planning phase of The City+The Arch+The River 2015 International Design Competition.
| Sep 22, 2010
Satellier, Potential + Semac close investment deal
Satellier, a world leader in providing CAD and Building Information Modeling (BIM) outsourced services to the architecture, engineering and construction industry, announces a strategic minority investment from India-based top engineering firm Potential + Semac, ushering in the next evolution of the global architecture support industry.
