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
Building Team | Jul 25, 2022
First Ismaili Center in the U.S. combines Islamic design with Texas influences
Construction has begun on the first Ismaili Center in the U.S. in Houston.
Building Team | Jul 20, 2022
San Francisco overtakes Tokyo as the world’s most expensive city for construction
San Francisco has overtaken Tokyo as the world’s most expensive city for construction, according to a new report from Turner & Townsend.
Libraries | Jul 20, 2022
Canada to open one of the world’s largest library and archive facilities
When it opens in 2026, Ādisōke is expected to be one of the largest library and archive facilities in the world.
Energy-Efficient Design | Jul 19, 2022
All is not lost: 3 ways architects can respond to the Supreme Court’s EPA ruling
The U.S. Supreme Court’s ruling to limit the Environmental Protection Agency’s power to regulate greenhouse gas (GHG) emissions from power plants dealt a significant blow to our ability to fight the climate crisis with federal policy.
Office Buildings | Jul 19, 2022
Austin adaptive reuse project transforms warehouse site into indoor-outdoor creative office building
Fifth and Tillery, an adaptive reuse project, has revitalized a post-industrial site in East Austin, Texas.
Women in Design+Construction | Jul 18, 2022
Registration is open for BD+C's 2022 Women in Design+Construction Conference
Join your AEC industry peers in Chicago, September 26-28, 2022, for the 7th annual Women in Design+Construction Conference, hosted by the BD+C editorial team and the 35-person WIDC Advisory Board.
Airports | Jul 18, 2022
FAA will award nearly $1 billion for airport projects
The Federal Aviation Administration (FAA) will award nearly $1 billion to 85 airports of all sizes across the country to improve terminals.
Building Team | Jul 18, 2022
Understanding the growing design-build market
FMI’s new analysis of the design-build market forecast for the next fives years shows that this delivery method will continue to grow, despite challenges from the COVID-19 pandemic.
Mixed-Use | Jul 18, 2022
Mixed-use development outside Prague uses a material made from leftover bricks
Outside Prague, the Sugar Factory, a mixed-used residential development with public space, marks the largest project to use the sustainable material Rebetong.
Building Team | Jul 15, 2022
ABC: Construction materials prices increased in June, up 20% from a year ago
Construction input prices increased 1.9% in June compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
