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
| Dec 17, 2010
How to Win More University Projects
University architects representing four prominent institutions of higher learning tell how your firm can get the inside track on major projects.
| Dec 13, 2010
Energy efficiency No. 1 priority for commercial office tenants
Green building initiatives are a key influencer when tenants decide to sign a commercial real estate lease, according to a survey by GE Capital Real Estate. The survey, which was conducted over the past year and included more than 2,220 office tenants in the U.S., Canada, France, Germany, Sweden, the UK, Spain, and Japan, shows that energy efficiency remains the No. 1 priority in most countries. Also ranking near the top: waste reduction programs and indoor air.
| Dec 7, 2010
Are green building RFPs more important than contracts?
The Request for Proposal (RFP) process is key to managing a successful LEED project, according to Green Building Law Update. While most people think a contract is the key element to a successful construction project, successfully managing a LEED project requires a clear RFP that addresses many of the problems that can lead to litigation.
| Dec 7, 2010
Blue is the future of green design
Blue design creates places that are not just neutral, but actually add back to the world and is the future of sustainable design and architecture, according to an interview with Paul Eagle, managing director of Perkins+Will, New York; and Janice Barnes, principal at the firm and global discipline leader for planning and strategies.
| Dec 7, 2010
Green building thrives in shaky economy
Green building’s momentum hasn’t been stopped by the economic recession and will keep speeding through the recovery, while at the same time building owners are looking to go green more for economic reasons than environmental ones. Green building has grown 50% in the past two years; total construction starts have shrunk 26% over the same time period, according to “Green Outlook 2011” report. The green-building sector is expected to nearly triple by 2015, representing as much as $145 billion in new construction activity.
| Dec 7, 2010
USGBC: Wood-certification benchmarks fail to pass
The proposed Forest Certification Benchmark to determine when wood-certification groups would have their certification qualify for points in the LEED rating systemdid not pass the USGBC member ballot. As a result, the Certified Wood credit in LEED will remain as it is currently written. To date, only wood certified by the Forest Stewardship Council qualifies for a point in the LEED, while other organizations, such as the Sustainable Forestry Initiative, the Canadian Standards Association, and the American Tree Farm System, are excluded.
| Dec 7, 2010
Prospects for multifamily sector improve greatly
The multifamily sector is showing signs of a real recovery, with nearly 22,000 new apartment units delivered to the market. Net absorption in the third quarter surged by 94,000 units, dropping the national vacancy rate from 7.8% to 7.1%, one of the largest quarterly drops on record, and rents increased for the second quarter in a row.
| Dec 7, 2010
Hot rumor: Norman Foster designing Apple’s new campus
Lord Norman Foster, reportedly has been selected to design Apple’s new campus in Cupertino, Calif. If the news is true, Foster is a good match for Apple say experts. Foster built his celebrity by marrying big gestures to technological wizardry. And, unlike some starchitects, he has glommed onto the environmental revolution—something Apple has made a point of embracing, too.
| Dec 7, 2010
10 megacities of the near future
With Beijing, Shanghai, and Mumbai already on the global radar, where can the next wave of construction be found? Far beyond China, India, and even Brazil it’s predicted. The world’s next future megacities could include Istanbul, Turkey; Ho Chi Minh City, Vietnam; and Khartoum, Sudan, among others. Read about these emerging and little-known behemoths.
