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
| Aug 11, 2010
AIANY partners with New York's building department to launch design competition for safer, more appealing sidewalk shed
The New York City Department of Buildings (DOB) and the New York Chapter of the American Institute of Architects (AIANY) today announced the launch of the urbanSHED International Design Competition with support from the Alliance for Downtown New York, ABNY Foundation, Illuminating Engineering Society New York City Section (IESNYC), and the New York Building Congress.
| Aug 11, 2010
Construction employment declines in 48 states in August compared to last year
Construction employment saw significant declines in all but two states this August compared to last year according to an analysis of new state-by-state employment figures released today by the federal government. The analysis, conducted by the Associated General Contractors of America, however did show that the number of states gaining construction jobs increased slightly in August compared to July 2009.
| Aug 11, 2010
Stimulus funding helps get NOAA project off the ground
The award-winning design for the National Oceanic and Atmospheric Administration’s (NOAA) new Southwest Fisheries Science Center (SWFSC) replacement laboratory saw its first sign of movement on Sept 15 with a groundbreaking ceremony held in La Jolla, Calif. The $102 million project is funded primarily by the American Recovery and Reinvestment Act (ARRA), resulting in a rapidly advanced construction plan for the facility.
| Aug 11, 2010
New book on ‘Green Workplace’ by HOK’s Leigh Stringer, a BD+C 40 under 40 winner
The new book The Green Workplace is a comprehensive guide that demonstrates how green businesses can reduce costs, improve recruitment and retention, increase shareholder value, and contribute to a healthier natural environment.
| Aug 11, 2010
BIM adoption rate exceeds 80% among nation’s largest AEC firms
The nation’s largest architecture, engineering, and construction companies are on the BIM bandwagon in a big way, according to Building Design+Construction’s premier Top 170 BIM Adopters ranking, published as part of the 2009 Giants 300 survey. Of the 320 AEC firms that participated in Giants survey, 83% report having at least one BIM seat license in house, and nearly a quarter (23%) have 100-plus seats.
| Aug 11, 2010
PCA partners with MIT on concrete research center
MIT today announced the creation of the Concrete Sustainability Hub, a research center established at MIT in collaboration with the Portland Cement Association (PCA) and Ready Mixed Concrete (RMC) Research & Education Foundation.
| Aug 11, 2010
Study explains the financial value of green commercial buildings
Green building may be booming, especially in the Northwest, but the claims made for high-performance buildings have been slow to gain traction in the financial community. Appraisers, lenders, investors and brokers have found it difficult to confirm the value of high-performance green features and related savings. A new study of office buildings identifies how high-performance green features and systems can increase the value of commercial buildings.
| Aug 11, 2010
Architecture Billings Index flat in May, according to AIA
After a slight decline in April, the Architecture Billings Index was up a tenth of a point to 42.9 in May. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. Any score above 50 indicates an increase in billings.
| Aug 11, 2010
Architecture Billings Index drops to lowest level since June
Another stall in the recovery for the construction industry as the Architecture Billings Index (ABI) dropped to its lowest level since June. The American Institute of Architects (AIA) reported the August ABI rating was 41.7, down slightly from 43.1 in July. This score indicates a decline in demand for design services (any score above 50 indicates an increase in billings).
