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
Burwell Architects, Ziegler Cooper Architects announce merger
Ziegler Cooper Architects is pleased to announce that Burwell Architects has merged into the Corporate Interior Studio of Ziegler Cooper Architects. We believe the new relationship will enhance and expand the services we can provide to our clients.
| Aug 11, 2010
KlingStubbins and Tocci awarded GSA contract for nationwide BIM services
KlingStubbins and Tocci Building Corporation announced they have been selected as a prime contractor team to participate in a $30M, five-year contract to provide Building Information Modeling (BIM) Services for the U.S. General Services Administration (GSA).
| Aug 11, 2010
Sika Sarnafil announces 2009 Project of the Year winners
Sika Sarnafil announced winners of the second annual Sika Sarnafil Roof Consultant Project of the Year competition today. First place was awarded to SRI Consultants, Inc., of Middleton, WI; second place to INSPEC, Inc., of Minneapolis, MN; and Simpson, Gumpertz & Heger of Los Angeles, California, won the third place honor. The competition recognizes and celebrates excellence in roofing design.
| Aug 11, 2010
Kingspan insulated panels showcase net-zero energy modeling
Kingspan Insulated Panels, Inc. is demonstrating energy modeling programs to illustrate how far Envelope First Strategies could advance beyond Leadership in Energy and Environmental Design (LEED), Energy Code and the Department of Energy (DOE) Net-Zero Energy goal of 2025. Kingspan will showcase the models in their exhibit (#954) during the Greenbuild 2009 International Conference and Expo, November 11-13 in Phoenix.
| Aug 11, 2010
Green Guide for Health Care launches pilot program, looks for participants
In first quarter 2010, the Green Guide for Health Care, in collaboration with Practice Greenhealth, is launching a one-year Green Guide for Health Care Operations Pilot Program for healthcare organizations engaged in any or all aspects of green operations initiatives, based on Green Guide v2.2 Operations section.
| Aug 11, 2010
Sustainable Buildings as Teaching Tools: 4 Strategies for Integrating Buildings into Experiential Learning
4 Strategies for Integrating Buildings into Experiential Learning
| Aug 11, 2010
Report: Most data centers are too cold
A recent study (PDF) by server and computing giants shows that data centers are wasting energy-and money-by over-cooling their servers, according to a story in The Register.
| Aug 11, 2010
New landscape rating system launches, completes green building puzzle
On November 5, 2009, the Sustainable Sites Initiative released the nation's first rating system for the design, construction and maintenance of sustainable landscapes, with or without buildings.
| Aug 11, 2010
Las Vegas announces Green Building Rebate Program
The city of Las Vegas announced it will begin a Green Building Rebate Program to stimulate new green building construction and provide energy efficiency retrofits to existing buildings. The green building program provides rebates for new construction and existing commercial and residential retrofits for buildings who construct buildings or projects to green building program standards.
