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
AIA Course: Building with concrete – Design and construction techniques
Concrete maintains a special reputation for strength, durability, flexibility, and sustainability. These associations and a host of other factors have made it one of the most widely used building materials globally in just one century. Take this free AIA/CES course from Building Design+Construction and earn 1.0 AIA learning unit.
| Aug 11, 2010
Blue-Light Schoolhouses
Add the explosion in the number of school-aged kids nationally to the glut of huge, vacant stores in many communities and what do you get? Big boxes being turned into schools. For districts facing population pressure, these empty retail buildings can be the key to creating classrooms quickly, and at a significant cost advantage.
| Aug 11, 2010
Great Solutions: Green Building
27. Next-Generation Green Roofs Sprout up in New York New York is not particularly known for its green roofs, but two recent projects may put the Big Apple on the map. In spring 2010, the Lincoln Center for the Performing Arts will debut one of the nation's first fully walkable green roofs. Located across from the Juilliard School in Lincoln Center's North Plaza, Illumination Lawn will consist ...
| Aug 11, 2010
Loft Condo Conversion That's Outside the Box
Few people would have taken a look at a century-old cigar box factory with crumbling masonry and rotted wood beams and envisioned stylish loft condos, but Miles Development Partners did just that. And they made that vision a reality at Box Factory Lofts in historic Ybor City, Fla. Once the largest cigar box plant in the world, the Tampa Box Company produced boxes of many shapes and sizes, spec...
| Aug 11, 2010
Idea Center at Playhouse Square: A better idea
Through a unique partnership between a public media organization and a performing arts/education entity, a historic building in the heart of downtown Cleveland has been renovated as a model of sustainability and architectural innovation. Playhouse Square, which had been working for more than 30 years to revitalize the city's arts district, teamed up with ideastream, a newly formed media group t...
| Aug 11, 2010
Pioneer Courthouse: Shaking up the court
In the days when three-quarters of America was a wild, lawless no-man's land, Pioneer Courthouse in Portland, Ore., stood out as a symbol of justice and national unity. The oldest surviving federal structure in the Pacific Northwest and the second-oldest courthouse west of the Mississippi, Pioneer Courthouse was designed in 1875 by Alfred Mullett, the Supervising Architect of the Treasury.
| Aug 11, 2010
Divine intervention
Designed by H. H. Richardson in the 1870s to serve the city's burgeoning Back Bay neighborhood, Trinity Church in the City of Boston would come to represent the essence of the Richardsonian Romanesque style, with its clay tile roof, abundant use of polychromy, rough-faced stone, heavy arches, and massive size.
| Aug 11, 2010
Westin Hotel
Mid-twentieth-century projects are in a state of limbo. In many cities, safeguards against quick demolition don't even cover “new” buildings built after 1939, yet many such buildings may be obsolete by current standards. The Farmers and Mechanics Savings Bank, located in downtown Minneapolis, was one such building, a rare example of architecture from a time when American design was ...
| Aug 11, 2010
Dream Fields, Lone Star Style
How important are athletic programs to U.S. school districts? Here's one leading indicator: In 2005, the National Football League sold 17 million tickets. That same year, America's high schools sold an estimated 225 million tickets to football games, according to the American Football Coaches Association.
| Aug 11, 2010
Platinum Award: Monumentally Hip Hotel Conversion
At one time the tallest building west of the Mississippi, the Foshay Tower has stood proudly on the Minneapolis skyline since 1929. Built by Wilbur Foshay as a tribute to the Washington Monument, the 30-story obelisk served as an office building—and cultural icon—for more than 70 years before the Ryan Companies and co-developer RWB Holdings partnered with Starwood Hotels & Resor...
