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
University Buildings | Jun 28, 2024
The American University in Cairo launches a 270,000-sf expansion of its campus in New Cairo, Egypt
In New Cairo, Egypt, The American University in Cairo (AUC) has broken ground on a roughly 270,000-sf expansion of its campus. The project encompasses two new buildings intended to enhance the physical campus and support AUC’s mission to provide top-tier education and research.
MFPRO+ New Projects | Jun 27, 2024
Chicago’s long-vacant Spire site will be home to a two-tower residential development
In downtown Chicago, the site of the planned Chicago Spire, at the confluence of Lake Michigan and the Chicago River, has sat vacant since construction ceased in the wake of the Great Recession. In the next few years, the site will be home to a new two-tower residential development, 400 Lake Shore.
Codes and Standards | Jun 27, 2024
Berkeley, Calif., voters will decide whether to tax large buildings with gas hookups
After a court struck down a first-in-the-nation ban on gas hookups in new buildings last year, voters in Berkeley, Calif., will have their say in November on a measure to tax large buildings that use natural gas.
Mass Timber | Jun 26, 2024
Oregon State University builds a first-of-its-kind mass timber research lab
In Corvallis, Oreg., the Jen-Hsun Huang and Lori Mills Huang Collaborative Innovation Complex at Oregon State University aims to achieve a distinction among the world’s experimental research labs: It will be the first all-mass-timber lab meeting rigorous vibration criteria (2000 micro-inches per second, or MIPS).
Sustainability | Jun 26, 2024
5 ways ESG can influence design and create opportunities
Gensler sustainability leaders Stacey Olson, Anthony Brower, and Audrey Handelman share five ways they're rethinking designing for ESG, using a science-based approach that can impact the ESG value chain.
Student Housing | Jun 25, 2024
P3 student housing project with 176 units slated for Purdue University Fort Wayne
A public/private partnership will fund a four-story, 213,000 sf apartment complex on Purdue University Fort Wayne’s (PFW’s) North Campus in Fort Wayne, Indiana. The P3 entity was formed exclusively for this property.
Sustainability | Jun 24, 2024
CBRE to use Climate X platform to help clients calculate climate-related risks
CBRE will use risk analysis platform Climate X to provide climate risk data to commercial renters and property owners. The agreement will help clients calculate climate-related risks and return on investments for retrofits or acquisitions that can boost resiliency.
MFPRO+ News | Jun 24, 2024
‘Yes in God’s Backyard’ movement could create more affordable housing
The so-called “Yes in God’s Backyard” (YIGBY) movement, where houses of worship convert their properties to housing, could help alleviate the serious housing crisis affecting many communities around the country.
Student Housing | Jun 20, 2024
How student housing developments are evolving to meet new expectations
The days of uninspired dorm rooms with little more than a bed and a communal bathroom down the hall are long gone. Students increasingly seek inclusive design, communities to enhance learning and living, and a focus on wellness that encompasses everything from meditation spaces to mental health resources.
Museums | Jun 20, 2024
Connecticut’s Bruce Museum more than doubles its size with a 42,000-sf, three-floor addition
In Greenwich, Conn., the Bruce Museum, a multidisciplinary institution highlighting art, science, and history, has undergone a campus revitalization and expansion that more than doubles the museum’s size. Designed by EskewDumezRipple and built by Turner Construction, the project includes a 42,000-sf, three-floor addition as well as a comprehensive renovation of the 32,500-sf museum, which was originally built as a private home in the mid-19th century and expanded in the early 1990s.