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
Citizenship building in Texas targets LEED Silver
The Department of Homeland Security's new U.S. Citizenship and Immigration Services facility in Irving, Texas, was designed by 4240 Architecture and developed by JDL Castle Corporation. The focal point of the two-story, 56,000-sf building is the double-height, glass-walled Ceremony Room where new citizens take the oath.
| Aug 11, 2010
Brooklyn's tallest building reaches 514 feet
With the Brooklyner now topped off, the 514-foot-high apartment tower is Brooklyn's tallest building. Designed by New York-based Gerner Kronick + Valcarcel Architects and developed by The Clarett Group, the soaring 51-story tower is constructed of cast-in-place concrete and clad with window walls and decorative metal panels.
| Aug 11, 2010
Dallas Center for the Performing Arts opens
The Dallas Center for the Performing Arts, a new multi-venue center for music, opera, theater, and dance, will open this month, completing the 25-year vision of the Dallas Arts District. Foster + Partners, Rem Koolhaas, Joshua Prince-Ramus, and Skidmore Owings & Merrill are among the architecture firms involved in the development, which includes four venues unified by a 10-acre park.
| Aug 11, 2010
Polshek unveils design for University of North Texas business building
New York City-based architect Polshek Partnership unveiled its design scheme for the $70 million Business Leadership Building at the University of North Texas in Denton. Designed to provide UNT’s 5,600-plus business majors with a state-of-the-art learning environment, the 180,000-sf facility will include an open atrium, an internet café, and numerous study and tutoring rooms—al...
| Aug 11, 2010
School district plans net-zero building
Camas (Wash.) School District is planning to utilize one of three energy sources—photovoltaics, wind turbine, or geothermal—to help take its new community high school completely off the grid. The school district commissioned Interface Engineering to explore all three options for the project, which is scheduled to break ground in August.
| Aug 11, 2010
Cooper Union academic building designed to reach LEED Platinum
Morphosis Architects and Gruzen Samton are collaborating on an ultra-green academic building for New York’s Cooper Union that is designed to achieve LEED Platinum certification. The program for the nine-story facility mixes state-of-the-art laboratories, classrooms, a multipurpose auditorium, and a range of public and social spaces.
| Aug 11, 2010
LA high school takes design cue from historic Mexican architecture
The Los Angeles Unified School District recently opened the $75 million Felicitas and Gonzalo Mendez Learning Center, a high school in the Los Angeles neighborhood of Boyle Heights, near Little Tokyo. Designed by Nadel Architects in a joint venture with Barrio Planners Inc., the 114,000-sf school is vertically integrated, allowing the campus to fit on a compact, six-acre site.
| Aug 11, 2010
Take the hassle out of managing subcontractors
As general contractors look to technology for an edge in the slowing commercial construction market, Web-based bidding programs are helping them to connecting bid information, subcontractors, and proposals. A 2008 survey by the Construction Financial Management Association found that 62% of general contractors participated in Web-based construction bidding vs.
| Aug 11, 2010
Toronto mandates green roofs
The city of Toronto late last month passed a new green roof by-law that consists of a green roof construction standard and a mandatory requirement for green roofs on all classes of new buildings. The by-law requires up to 50% green roof coverage on multi-unit residential dwellings over six stories, schools, nonprofit housing, and commercial and industrial buildings.
| Aug 11, 2010
Carpenters' union helping build its own headquarters
The New England Regional Council of Carpenters headquarters in Dorchester, Mass., is taking shape within a 1940s industrial building. The Building Team of ADD Inc., RDK Engineers, Suffolk Construction, and the carpenters' Joint Apprenticeship Training Committee, is giving the old facility a modern makeover by converting the existing two-story structure into a three-story, 75,000-sf, LEED-certif...
