Nearly half of the respondents (46.1%) to an exclusive Building Design+Construction survey of AEC professionals reported that revenues had increased this year compared to 2012, with another 24.2% saying cash flow had stayed the same.
The majority (56.8%) of respondents—architects, engineers, contractors, building owners, and others in the commercial, industrial, multifamily, and institutional field—said their firms will bump up revenues next year, with 31.4% saying business will stay the same and only 11.8% predicting it will decline. A majority (55.5%) rated the health of their firms as good (35.6%) or very good (19.9%).
As has been the case in recent years, the overwhelming majority (71.2%) rated “general economic conditions (i.e., recession)” as the most important concern their firms will face in 2014.
Competition from other firms went up as a factor for the third year in a row, to 47.6% (44.9% in 2012, 40.1% in 2011). Nearly four in five respondents (79.3%) described the current business climate for their firms as “very” to “intensely” competitive; that’s up somewhat from 73.4% in 2012 and 74.8% in 2011. But “having insufficient capital funding for projects” declined slightly, to 24.1% of respondents, down from 29.7% in 2012 and 34.5% in 2011.
AEC respondents to this third annual survey of BD+C subscribers were still worried about the economy. On the other hand, “avoiding layoffs” (17.6%), “avoiding benefit reductions” (16.4%), and “keeping staff motivated” (14.6%) were of less concern.
DATA CENTERS CONTINUE THEIR SURGE INTO 2014
Asked to rate their firms’ prospects in specific construction sectors on a five-point scale from “excellent” to “very weak,” respondents gave data centers high marks. (Note: Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:
• Data centers and mission-critical facilities continued to show strength, with the majority (56.0%) of respondents in the good/excellent category, compared to 52.1% last year and 45.2% the year before.
• Healthcare continued its leadership as the most highly desirable sector, with more than three in five respondents (62.5%) giving it a good to excellent rating, up from 58.8% last year.
• The apartment boom registered with AEC professionals, who gave multifamily housing a 56.1% good/excellent rating.
• Industrial/warehouse facilities keep moving up in the AEC psyche, registering a 33.0% interest level on the good/excellent scale, a significant climb from last year’s 25.5%.
• Retail commercial construction also showed vitality. Nearly a third of respondents (31.4%) came out on the good/excellent side for the coming year, well up from last year’s 19.9% rating.
• Nearly two-thirds of those surveyed (66.0%) said senior and assisted-living facilities look like good/excellent prospects for their firms, significantly up from last year’s healthy 50.5%. Hello, baby boomers!
• College and university facilities got the nod from 44.8% of respondents on the good to excellent scale, up from 37.8% last year.
As for government/military projects, the survey was taken before the full impact of the sequestration was known. The sector was rated good to excellent by 33.7% of respondents, much along the lines of last year’s 36.1% of respondents, down slightly from the previous year’s 41.1%.
While the construction of new office buildings drew tepid response (26.9%) in the good/excellent scale, that was still up significantly from last year’s 15.6% rating. However, a solid majority (52.1%) of respondents said office fitouts and interior renovations look good to excellent for 2014. That was likely a statistically significant leap from last year’s 35.7% who said office interiors would be a strong sector.
Respondents said their firms will likely use multiple strategies to stay ahead of the game in 2014. Only a small percentage (3.2%) said they think their companies will open a new office in the U.S. or Canada, while 4.5% said their firms might open an international office.
In fact, reconstruction, historic preservation, and renovations accounted for at least 25% of work for more than a third (38.5%) of respondents, up slightly from the 34.6% of respondents’ firms in 2012 and roughly the same as in 2011 (36.3%).
K-12 schools perked up a bit, with 30.9% saying the sector looks good to excellent for 2014, compared with 22.9% last year and 23.2% the year before.
TAKING ON THE DEMANDS OF BIM/VDC TECHNOLOGY
What about BIM? Is its promise holding true? Somewhat surprisingly, more than one in five respondents (22.7%) said their firms do not use building information modeling, about what was recorded over the previous two years.
Remarkably, precisely the same percentage of respondents (26.8%) said their firms used BIM in the majority of projects based on dollar value as in the last two annual surveys. Nearly two in five (39.8%) said their firms’ use of BIM will rise in the coming year; similarly, two-fifths (42.2%) of respondents said their companies will be investing more in technology in 2014.
As for social media, LinkedIn remained the top choice of respondents, at 53.1%, but that was a steep decline from last year’s 85.1% for LinkedIn. Facebook also took a hit, dropping to 32.5% in popularity, versus 49.5% last year, while Twitter dropped from 21.1% last year to 13.4%. Once again, a big chunk of respondents (31.3%) said they did not use social media channels.
Of the 400 who gave their professional description, 45.0% were architects; 8.0%, engineers; 28.8%, contractors; 9.8%, building owners, developers, or facility managers; and 8.6%, consultants or “other.” The margin of error was 4.8% at the 95% confidence level.
Respondents overwhelmingly said they expect prices of materials to rise in the coming year, with no respondents saying they expect such prices to fall.
More than two-thirds of respondents (68.6%) said they expect bid prices to go up next year. Survey results have a margin of error of 4.8%.
For more on AEC firms' financial performance, see BD+C's 2013 Giants 300 Report.
Related Stories
| Jan 3, 2012
BIM: not just for new buildings
Ohio State University Medical Center is converting 55 Medical Center buildings from AutoCAD to BIM to improve quality and speed of decision making related to facility use, renovations, maintenance, and more.
| Jan 3, 2012
New SJI Rule on Steel Joists
A new rule from the Steel Joist Institute clarifies when local reinforcement of joists is required for chord loads away from panel points. SJI members offer guidance about how and when to specify loads.
| Jan 3, 2012
AIA Course: New Developments in Concrete Construction
Earn 1.0 AIA/CES learning units by studying this article and successfully completing the online exam.
| Jan 3, 2012
The Value of Historic Paint Investigations
An expert conservator provides a three-step approach to determining a historic building’s “period of significance”—and how to restore its painted surfaces to the correct patterns and colors.
| Jan 3, 2012
28th Annual Reconstruction Awards: Bringing Hope to Cancer Patients
A gothic-style structure is reconstructed into comfortable, modern patient residence facility for the American Cancer Society.
| Jan 3, 2012
Art Gensler: Still Making a Difference for Clients Every Day
After running what is today the largest architecture firm in the world for more than four decades, M. Arthur Gensler, Jr., FAIA, FIIDA, RIBA, is content to be just another employee at the firm that bears his name.
| Jan 3, 2012
Gensler: 'The One Firm Firm'
The giant architecture firm succeeds by giving each of its more than 3,000 employees the opportunity for career growth and professional leadership.
| Jan 3, 2012
Rental Renaissance, The Rebirth of the Apartment Market
Across much of the U.S., apartment rents are rising, vacancy rates are falling. In just about every major urban area, new multifamily rental projects and major renovations are coming online. It may be too soon to pronounce the rental market fully recovered, but the trend is promising.
| Dec 29, 2011
OSHA enforcing new fall hazard standards
OSHA is enforcing its new fall protection standards, as evidenced by a recent crackdown in New York.
| Dec 29, 2011
Decision not to fireproof the new World Trade Center Transportation Hub criticized
Some criticized the decision, reasoning that the structure could be a terrorist target.