The market outlook is brighter for U.S. architecture, engineering, and construction companies, with a majority of AEC firms reporting higher revenues, strong forecasts, and sound financial health, according to Building Design+Construction’s fourth annual Market Forecast Survey.
More than half (54.4%) of the 342 AEC professionals who responded to the survey reported that revenues had increased at their firms this year, and nearly two-thirds (63.4%) are forecasting revenue growth for 2015. This represents a sizable uptick from BD+C’s 2013 market forecast survey, in which 46.1% of respondents reported higher revenue for the year and 56.8% predicted growth for 2014.
Asked to rate their firms’ overall financial health, almost three-quarters (72.6%) responded either “good” (50.4%) or “very good” (22.2%), compared to just 55.5% in last year’s survey. Only 8.8% indicated that their firm is in a weakened state financially.
Firms are looking to sustain growth during the next two years through a variety of business development strategies, including strategic hires (48.8% rated it as a top tactic for growth), strengthened marketing/public relations efforts (46.2%), more staff training and education (41.9%), technology upgrades (41.9%), and launching a new service or business opportunity (33.4%).
Top concerns heading into 2015: general economic conditions (54.9% ranked it as a top concern), competition from other firms (47.7%), managing cash flow (29.4%), price increases in materials/services (28.8%), government regulations/restrictions (26.5%), and insufficient capital funding for projects (23.8%).
Healthcare keeps chugging, multifamily moves up
Survey respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale, from “excellent” to “very weak.” (Note: Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:
• For the second consecutive year, the healthcare sector ranked as one of the most active building sectors, with nearly two-thirds of respondents (63.6%) in the good/excellent category, compared to 62.5% in 2013 and 58.8% the previous year.
• Multifamily saw a nice bump in activity over last year, thanks primarily to the nation’s continued rental housing boom. More than six in 10 respondents (62.3%) gave the sector a good or excellent rating, up from 56.1% in the 2013 survey.
• As more Baby Boomers leave the workforce and enter their retirement years, the demand for senior and assisted living facilities is expected to spike. This trend is reflected in the survey results, with 59.2% of respondents indicating good/excellent prospects for this sector in 2015—down a bit from the 2013 survey (66.0%), but up strongly from the previous year (50.5%).
• The data center sector continues to be a powerhouse market for AEC firms, as data center providers, corporations, institutions, and government agencies rush to keep pace with the boom in mobile and cloud computing. The majority of respondents (58.2%) had either good or excellent prospects for the sector in 2015, up from 56.0% in 2013 and 45.2% the year before.
• The industrial/warehouse and office building sectors saw the largest year-over-year jump in activity among the respondent firms. Nearly half (43.3%) ranked the industrial sector in the good/excellent category, up from 33.0% last year, while 35.4% said they were upbeat about the office sector, versus 26.9% the previous year.
• Other sectors with sizable YoY percentage growth: retail (up 6.5 points, to 37.9%), multifamily (up 6.2 points, to 62.3%), K-12 schools (up 5.9 points, to 36.8%), and office interiors/fitouts (up 5.6 points, to 57.7%). The senior/assisted living sector was the only market to see a significant YoY percentage decline, but it still ranked as one of the industry’s most active sectors, according to the survey.
Uptick in BIM/VDC adoption
Following three years of relatively stagnant growth in the adoption of BIM/VDC software tools among BD+C readers, this segment saw modest growth in 2014. Eighty percent of respondents said their firm uses BIM/VDC tools on at least some of their projects, up slightly from 77.3% in the 2013 survey. The number of BIM power users increased, as well: 17.3% indicated that their firm uses BIM on more than 75% of projects, up from 12.2% last year.
The respondent breakdown by profession: architect/designer (45.3%), contractor (19.0%), engineer (16.7%), owner/developer (7.0%), consultant (4.1%), facility manager (3.8%), other (4.1%).
Related Stories
MFPRO+ New Projects | Oct 30, 2024
BIG’s One High Line finally reaches completion in New York City’s West Chelsea neighborhood
One High Line, a luxury residential project spanning a full city block in New York’s West Chelsea neighborhood, reached completion this summer following years of delays related to investor lawsuits.
Urban Planning | Oct 30, 2024
Bridging the gap: How early architect involvement can revolutionize a city’s capital improvement plans
Capital Improvement Plans (CIPs) typically span three to five years and outline future city projects and their costs. While they set the stage, the design and construction of these projects often extend beyond the CIP window, leading to a disconnect between the initial budget and evolving project scope. This can result in financial shortfalls, forcing cities to cut back on critical project features.
MFPRO+ New Projects | Oct 30, 2024
Luxury waterfront tower in Brooklyn features East River and Manhattan skyline views
Leasing recently began for The Dupont, a 41-story luxury rental property along the Brooklyn, N.Y., waterfront. Located within the 22-acre Greenpoint Landing, where it overlooks the newly constructed Newtown Barge Park, the high-rise features East River and Manhattan skyline views along with 20,000 sf of indoor and outdoor communal space.
Libraries | Oct 30, 2024
Reasons to reinvent the Midcentury academic library
DLR Group's Interior Design Leader Gretchen Holy, Assoc. IIDA, shares the idea that a designer's responsibility to embrace a library’s history, respect its past, and create an environment that will serve student populations for the next 100 years.
Resiliency | Oct 29, 2024
Climate change degrades buildings slowly but steadily
While natural disasters such as hurricanes and wildfires can destroy buildings in minutes, other factors exacerbated by climate change degrade buildings more slowly but still cause costly damage.
Office Buildings | Oct 29, 2024
Editorial call for Office Building project case studies
BD+C editors are looking to feature a roundup of office building projects for 2024, including office-to-residential conversions. Deadline for submission: December 6, 2024.
Healthcare Facilities | Oct 28, 2024
New surgical tower is largest addition to UNC Health campus in Chapel Hill
Construction on UNC Health’s North Carolina Surgical Hospital, the largest addition to the Chapel Hill campus since it was built in 1952, was recently completed. The seven-story, 375,000-sf structure houses 26 operating rooms, four of which are hybrid size to accommodate additional equipment and technology for newly developed procedures.
Multifamily Housing | Oct 28, 2024
A case for mid-rise: How multifamily housing can reshape our cities
Often referred to as “five-over-ones,” the mid-rise apartment type is typically comprised of five stories of apartments on top of a concrete “podium” of ground-floor retail. The main criticism of the “five-over-one” is that they are often too predictable.
Sports and Recreational Facilities | Oct 24, 2024
Stadium renovation plans unveiled for Boston’s National Women’s Soccer League
A city-owned 75-year-old stadium in Boston’s historic Franklin Park will be renovated for a new National Women’s Soccer League team. The park, designed by Fredrick Law Olmsted in the 1880s, is the home of White Stadium, which was built in 1949 and has since fallen into disrepair.
Laboratories | Oct 23, 2024
From sterile to stimulating: The rise of community-centric life sciences campuses
To distinguish their life sciences campuses, developers are partnering with architectural and design firms to reimagine life sciences facilities as vibrant, welcoming destinations. By emphasizing four key elements—wellness, collaboration, biophilic design, and community integration—they are setting their properties apart.
