Coming off a record-setting year for the nonresidential construction industry (more than $760 billion was spent on new construction and renovation work nationwide last year), AEC firm leaders should be brimming with confidence over the growth potential for their firms heading into 2019. The arrow is pointing up for nearly all building sectors, construction backlogs remain healthy, and architecture firms continue to see strong demand for their design services, according to AIA and ABC data.
Yet despite the positive indicators for the market, AEC professionals remain largely cautious when it comes to growth prospects for 2019. In October, BD+C surveyed 314 readers about their thoughts on a variety of issues: materials prices, bid prices, obstacles to growth, emerging opportunities, etc. Only slightly more than half (56.0%) of industry professionals expect higher revenue for their firm in 2018 compared to last year. More surprisingly, 13.4% are forecasting a decrease in revenue.
And their forecast for 2019 isn’t much rosier: 54.7% expect revenue to increase, 8.7% call for a drop, and 36.7% predict flat revenue this year. This is a markedly different sentiment than last year’s respondents, who were much more upbeat with their forecasts for the upcoming year: 62.0% predicted revenue to rise and only 6.1% called for it to drop.
When asked about their top concerns for 2019, the largest number of respondents cited “general economic conditions” (52.7%) as a key issue, followed by “competition from other firms” (41.0%) and “price increases in materials and services” (39.0%). In fact, nearly 90% of respondents anticipate construction materials prices to rise in 2019. That’s up from 86% in last year’s survey of BD+C readers.
See Also: And then there were two: HQ2 sites, in hindsight, seemed obvious
To help keep their project pipelines full through 2019, AEC firms are focusing on a number of business development strategies heading into this year. Selective hires (44.1%) and marketing/public relations efforts (42.2%) top the list, followed by investments in technology (39.0%), staff training/education (35.9%), and new services/business opportunities (29.2%).
Healthcare facilities and multifamily housing head the list of the hottest sectors heading into 2019, according to survey respondents. More than half (52.5%) indicated that the prospects for healthcare/hospital work were either “excellent” or “good” for 2019; 52.4% said the same for multifamily housing work. Other strong building sectors: senior/assisted living facilities (51.9%), office interiors/fitouts (46.9%), industrial/warehouse buildings (42.7%), hotel/hospitality developments (39.7%), university facilities (38.2%), government/military buildings (37.5%), and office buildings (37.4).
Related Stories
| Aug 11, 2010
University of Florida aiming for nation’s first LEED Platinum parking garage
If all goes as planned, the University of Florida’s new $20 million Southwest Parking Garage Complex in Gainesville will soon become the first parking facility in the country to earn LEED Platinum status. Designed by the Boca Raton office of PGAL to meet criteria for the highest LEED certification category, the garage complex includes a six-level, 313,000-sf parking garage (927 spaces) and an attached, 10,000-sf, two-story transportation and parking services office building.
| Aug 11, 2010
Aslaug Haraldsdottir, Ph.D. receives highest honor from the Society of Women Engineers
The Society of Women Engineers (SWE) is pleased to announce Aslaug Haraldsdottir, Ph.D. as the recipient of the 2009 SWE Achievement Award for accomplishments in Air Traffic Management, communication, navigation and surveillance system design, greatly influencing the future worldwide Air Traffic Management systems.
| Aug 11, 2010
Nonresidential construction will be down 14% in 2009; 17% in 2010, according to FMI report
FMI released its Construction Outlook: Second Quarter 2009 Report, and the outlook isn't good for the nonresidential market. FMI forecasts the market to decline 14% this year, followed by a 17% slide in 2010. FMI says that while the economy is showing some signs of improvement, it is just the beginning of the downfall for nonresidential construction.
| Aug 11, 2010
GSA celebrates 60th anniversary
The U.S. General Services Administration today is commemorating its 60th anniversary as it engages in one of its its most challenging assignments ever—helping to achieve the goals of the American Recovery and Reinvestment Act.
| Aug 11, 2010
Draft NIST report on Cowboys practice facility collapse released for public comment
A fabric-covered, steel frame practice facility owned by the National Football League’s Dallas Cowboys collapsed under wind loads significantly less than those required under applicable design standards, according to a report released today for public comment by the Commerce Department's National Institute of Standards and Technology (NIST).
| Aug 11, 2010
Callison, MulvannyG2 among nation's largest retail design firms, according to BD+C's Giants 300 report
A ranking of the Top 75 Retail Design Firms based on Building Design+Construction's 2009 Giants 300 survey. For more Giants 300 rankings, visit http://www.BDCnetwork.com/Giants
| Aug 11, 2010
Kate Offringa named NAIMA's interim president and CEO
The NAIMA Board of Governors has named Kate Offringa interim President and CEO of the North American Insulation Manufacturers Association (“NAIMA”). Previously, Kate has served as NAIMA’s Vice President of Public Affairs.
| Aug 11, 2010
DLR Group planning Santa Cruz County Justice and Detention Center
The multifunctional project combines a new courthouse, adult detention, juvenile detention and sheriff’s offices - all in close proximity to each other. Serving all of Santa Cruz County in Arizona, the three-story project includes a new jail facility with separate areas for adults and juveniles, a sheriff’s office and a new courts and administration building with courts, offices and public service areas.
