Despite facing a litany of market impediments—the still-sluggish economy, construction labor shortages, the slow-to-recover education and healthcare markets—the majority of AEC firms saw revenues grow in 2015, and an even greater number expect earnings to rise in 2016, according to a survey of 337 AEC professionals by Building Design+Construction.
Nearly six out of 10 survey respondents (56.7%) indicated that revenues had increased at their firms in 2015, and 59.9% expect income from nonresidential building work to rise this year. This represents a slight uptick from 2014’s survey, when 54.4% reported higher revenue for the year.
About half of the respondents (45.7%) rated their firm’s 2015 business year as either “excellent” or “very good,” and just 2.1% said it was a “poor” year. Looking to 2016, 52.7% believe it will be “excellent” or “very good” from a revenue standpoint. Nearly three-quarters (71.4%) rated the overall health of their firm either “very good” or “good.”
Asked to rate their firm’s top business development tactics for 2016, strategic hiring (56.7% rated it as a top tactic for growth), marketing/public relations (54.6%), and technology upgrades (49.3%) topped the list. Other popular growth strategies include staff training/education (41.8%), a new service/business opportunity (32.9%), and a firm merger/acquisition (13.4%).
Among the top concerns for AEC firms are competition from other firms (58.2% ranked it as a top-three concern), general economic conditions (50.4%), managing cash flow (30.3%), and softness in fees/bids (27.6%).
HEALTHCARE SECTOR starting to REBOUND
Respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale from “excellent” to “very weak.” Among the findings:
The multifamily boom continues, as the Millennials and Baby Boomers gravitate to rental housing and an urban lifestyle. Multifamily ranked as the most active sector, with 69.7% of respondents rating it in the good/excellent category, up from 62.3% last year and 56.1% in 2013.
The healthcare market is starting to stabilize and grow, as hospitals and healthcare providers adjust to the post-Affordable Care Act world. The sector ranked as the second most active; 68.0% gave it a good/excellent rating, up from 63.6% in 2014 and 62.5% the previous year.
Other active sectors include senior/assisted living (63.1% rated it in the good/excellent category), office interiors/fitouts (62.4%), data centers/mission critical (59.3%), higher education (48.6%), industrial/warehouse (46.7%), retail (44.9%), and government/military (42.5%).
Respondents to the BD+C survey include architect/designers (52.2%), engineers (19.6%), contractors (18.4%), consultants (5.0%), owner/developers (1.2%), and facility managers (1.0%).
BIM/VDC TAKES HOLD
The adoption of building information modeling and virtual design and construction tools and processes continues to grow in the AEC marketplace. More than eight in 10 respondents (82.1%) said their firm uses BIM/VDC tools on at least some of its projects, up from 80.0% in 2014 and 77.3% in 2013. About a fifth (20.3%) said their firm uses BIM/VDC on more than 75% of projects, up from 17.3% last year and 12.2% in 2013.
Respondents to the BD+C survey include architect/designers (52.2%), engineers (19.6%), contractors (18.4%), consultants (5.0%), owner/developers (1.2%), and facility managers (1.0%).
Related Stories
Market Data | Sep 27, 2019
The global hotel construction pipeline ascends to new record highs
With the exception of Latin America, all regions of the globe either continued to set record high pipeline counts or have already settled into topping-out formations amidst concerns of a worldwide economic slowdown.
Market Data | Sep 25, 2019
Senate introduces The School Safety Clearinghouse Act
Legislation would create a federally funded and housed informational resource on safer school designs.
Market Data | Sep 18, 2019
Substantial decline in Architecture Billings
August report suggests greatest weakness in design activity in several years.
Market Data | Sep 17, 2019
ABC’s Construction Backlog Indicator inches lower in July
Backlog in the heavy industrial category increased by 2.3 months and now stands at its highest level in the history of the CBI series.
Market Data | Sep 13, 2019
Spending on megaprojects, already on the rise, could spike hard in the coming years
A new FMI report anticipates that megaprojects will account for one-fifth of annual construction spending within the next decade.
Architects | Sep 11, 2019
Buoyed by construction activity, architect compensation continues to see healthy gains
The latest AIA report breaks down its survey data by 44 positions and 28 metros.
Market Data | Sep 11, 2019
New 2030 Commitment report findings emphasize need for climate action
Profession must double down on efforts to meet 2030 targets.
Market Data | Sep 10, 2019
Apartment buildings and their residents contribute $3.4 trillion to the national economy
New data show how different aspects of the apartment industry positively impact national, state and local economies.
Market Data | Sep 3, 2019
Nonresidential construction spending slips in July 2019, but still surpasses $776 billion
Construction spending declined 0.3% in July, totaling $776 billion on a seasonally adjusted annualized basis.
Industry Research | Aug 29, 2019
Construction firms expect labor shortages to worsen over the next year
A new AGC-Autodesk survey finds more companies turning to technology to support their jobsites.
