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 | Nov 14, 2018
A new Joint Center report finds aging Americans less prepared to afford housing
The study foresees a significant segment of seniors struggling to buy or rent on their own or with other people.
Market Data | Nov 12, 2018
Leading hotel markets in the U.S. construction pipeline
Projects already under construction and those scheduled to start construction in the next 12 months, combined, have a total of 3,782 projects/213,798 rooms and are at cyclical highs.
Market Data | Nov 6, 2018
Unflagging national office market enjoys economic tailwinds
Stable vacancy helped push asking rents 4% higher in third quarter.
Market Data | Nov 2, 2018
Nonresidential spending retains momentum in September, up 8.9% year over year
Total nonresidential spending stood at $767.1 billion on a seasonally adjusted, annualized rate in September.
Market Data | Oct 30, 2018
Construction projects planned and ongoing by world’s megacities valued at $4.2trn
The report states that Dubai tops the list with total project values amounting to US$374.2bn.
Market Data | Oct 26, 2018
Nonresidential fixed investment returns to earth in Q3
Despite the broader economic growth, fixed investment inched 0.3% lower in the third quarter.
Market Data | Oct 24, 2018
Architecture firm billings slow but remain positive in September
Billings growth slows but is stable across sectors.
Market Data | Oct 19, 2018
New York’s five-year construction spending boom could be slowing over the next two years
Nonresidential building could still add more than 90 million sf through 2020.
Market Data | Oct 8, 2018
Global construction set to rise to US$12.9 trillion by 2022, driven by Asia Pacific, Africa and the Middle East
The pace of global construction growth is set to improve slightly to 3.7% between 2019 and 2020.
Market Data | Sep 25, 2018
Contractors remain upbeat in Q2, according to ABC’s latest Construction Confidence Index
More than three in four construction firms expect that sales will continue to rise over the next six months, while three in five expect higher profit margins.
