flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

AEC professionals cautiously optimistic about commercial construction in ’13

AEC professionals cautiously optimistic about commercial construction in ’13

Most economists say the U.S. is slowly emerging from the Great Recession, a view that was confirmed to some extent by an exclusive survey of 498 BD+C subscribers whose views we sought on the commercial construction industry’s outlook on business prospects for 2013.


By By Robert Cassidy | December 9, 2012
This article first appeared in the December 2012 issue of BD+C.

Most economists say the U.S. is slowly emerging from the Great Recession, a view that was confirmed to some extent by an exclusive survey of 498 BD+C subscribers whose views we sought on the commercial construction industry’s outlook on business prospects for 2013.

The majority (52.2%) of respondents—architects, engineers, contractors, buildings owners, and others in the commercial, industrial, and institutional field—said their firms were in at least “good” financial health, compared to 49.7% last year.

But a markedly strong showing (86.4%) said their firms would be up in revenues or would at least hold steady in 2013, versus 80.2% last year—an increase that may be not only statistically significant but also most certainly welcome for an industry that could use a bit of cheering.

As was the case last year, more than three-fourths of respondents (75.7%) rated “general economic conditions (i.e., recession)” as the most important concern their firms will face in 2013—roughly comparable to the 78.4% who responded that way last year.

Economy Remains Top Concern for ’13


                                                               2013            2012
General economic conditions                75.7%            78.4%
Competition from other firms                44.9%            40.1%
Managing cash flow                               37.6%            33.7%
Insufficient capital funding for projects 29.7%            34.5%
Softness in fees/bids                               29.7%            28.0%
Government regulations/restrictions       26.6%            23.0%
Price increases (e.g., materials, services)15.7%            18.1%
Avoiding layoffs                                      16.4%            14.3%
Keeping staff motivated                          14.3%            14.3%
Avoiding benefit reductions                    11.9%            12.5%

Other factors were largely within the same range as last year, given the margin of error (about 3.5-4%). Competition from other firms (44.9%) went up slightly (from 40.1% in 2011), while having insufficient capital funding for projects declined a bit, to 29.7%, from 34.5% the year before. For both years, nearly three in four (73.4% this year, 74.8% in 2011) described the current business situation for their firms as “very” to “intensely” competitive—further evidence that AEC firms are still struggling for every dollar.

HEALTHCARE, DATA CENTERS LOOK PROMISING FOR ’13

Respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale from “excellent” to “very weak.” (Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:

  • Healthcare continued to be the most highly rated sector, with nearly three-fifths of respondents (58.8%, vs. 54.6% last year) giving it a “good” to “excellent” rating.
  • Data centers and mission-critical facilities were also up, with the majority of respondents (52.1%) in the good/excellent category, compared to 45.2% last year
  • Senior and assisted-living facilities made a big jump, from last year’s 37.8% of respondents in the good/excellent category, to a majority this year, at 50.5%.
  • Government and military work was rated good to excellent by 36.1% of respondents, down slightly from last year’s 41.1%.
  • University/college facilities were rated good to excellent by 37.8% of respondents, versus 32.3% in 2011.
  • Retail commercial construction got a slight vote of confidence, with nearly one-fifth of respondents (19.9%) stating they thought their firms would have a good to excellent year, nearly double last year’s 11.1%.
  • Industrial and warehouse facilities might be staging a comeback: One-fourth (25.5%) of respondents whose firms engaged in that sector said they expect a good to excellent year in 2013; on the other hand, 35.8% said it would be weak or very weak.

Reconstruction—including historic preservation and renovations—accounted for at least 25% of work for more than a third (34.6%) of respondents’ firms, roughly the same as last year (36.3%). Office interiors and fitouts were down, with only 35.7% of this year’s respondents saying this sector would be good to excellent, compared to 42.7% last year.

The prospects for office buildings looked bleak, however, with only 15.6% saying that market would be good to excellent. The majority (55.2%) predicted office buildings would be “weak” or “very weak,” but that’s an improvement from 2011’s 67.3%.

The K-12 sector looked basically flat, with good/excellent responses from 22.9% of respondents this year, compared to 23.2% last year.

As for the use of building information modeling, one-fifth (20.2%) said their firm did not use BIM, about the same as in 2011 (20.6%). Of those who said their firms used BIM, a healthy 26.8% said BIM was used in the majority of projects, based on dollar value—precisely the same as last year. Only a few saw the use of BIM declining in the coming year. Nearly two-fifths (39.0%) of respondents said their companies would be beefing up their investments in technology.

On the communications front, nearly a third of respondents (32.9%) said they did not use social media. Of those who said they did, LinkedIn was the clear choice, at 85.1%, with Facebook in second place (49.5%) and Twitter bringing up the rear (21.1%).

Note: Of the 428 who gave their professional description, 42.1% were architects; 18.7%, engineers; 23.8%, contractors; 5.6% building owners, developers, or facility/property managers; and 9.8%, consultants or “other.” +

Related Stories

Engineers | Jun 14, 2023

The high cost of low maintenance

Walter P Moore’s Javier Balma, PhD, PE, SE, and Webb Wright, PE, identify the primary causes of engineering failures, define proactive versus reactive maintenance, recognize the reasons for deferred maintenance, and identify the financial and safety risks related to deferred maintenance.

University Buildings | Jun 14, 2023

Calif. State University’s new ‘library-plus’ building bridges upper and lower campuses

A three-story “library-plus” building at California State University, East Bay (CSUEB) that ties together the upper and lower campuses was recently completed. The 100,977-sf facility, known as the Collaborative Opportunities for Research & Engagement (“CORE”) Building, is one of the busiest libraries in the CSU system. The previous library served 1.2 million visitors annually.

Higher Education | Jun 14, 2023

Designing higher education facilities without knowing the end users

A team of architects with Page offers five important factors to consider when designing spaces for multiple—and potentially changing—stakeholders.

Resiliency | Jun 14, 2023

HUD offers $4.8 billion in funding for green and resilient building retrofit projects

The Department of Housing and Urban Development (HUD) recently released guidelines for its Green and Resilient Retrofit Program (GRRP) that has $4.8 billion for funding green projects.

Arenas | Jun 14, 2023

A multipurpose arena helps revitalize a historic African American community in Georgia

In Savannah, Ga., Enmarket Arena, a multipurpose arena that opened last year, has helped revitalize the city’s historic Canal District—home to a largely African American community that has been historically separated from the rest of downtown.

Building Materials | Jun 14, 2023

Construction input prices fall 0.6% in May 2023

Construction input prices fell 0.6% in May compared to the previous month, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics’ Producer Price Index data released today. Nonresidential construction input prices declined 0.5% for the month.

Mass Timber | Jun 13, 2023

Mass timber construction featured in two-story mixed-use art gallery and wine bar in Silicon Valley

The Edes Building, a two-story art gallery and wine bar in the Silicon Valley community of Morgan Hill, will prominently feature mass timber. Cross-laminated timber (CLT) and glulam posts and beams were specified for aesthetics, biophilic properties, and a reduced carbon footprint compared to concrete and steel alternatives.

Mixed-Use | Jun 12, 2023

Goettsch Partners completes its largest China project to date: a mixed-used, five-tower complex

Chicago-based global architecture firm Goettsch Partners (GP) recently announced the completion of its largest project in China to date: the China Resources Qianhai Center, a mixed-use complex in the Qianhai district of Shenzhen. Developed by CR Land, the project includes five towers totaling almost 472,000 square meters (4.6 million sf). 

Engineers | Jun 12, 2023

Stantec to acquire Environmental Systems Design

Stantec, a global leader in sustainable design and engineering, has signed an agreement to acquire Environmental Systems Design, Inc. (ESD), a 270-person engineering firm headquartered in Chicago. Founded in 1967, ESD has built a reputation for excellence and innovation in high-performance design with a roster of industry-leading clients. The terms of the transaction are not disclosed.

University Buildings | Jun 9, 2023

Cornell’s new information science building will foster dynamic exchange of ideas and quiet, focused research

Construction recently began on Cornell University’s new 135,000-sf building for the Cornell Ann S. Bowers College of Computing and Information Science (Cornell Bowers CIS). The structure will bring together the departments of Computer Science, Information Science, and Statistics and Data Science for the first time in one complex.

boombox1
boombox2
native1

More In Category


Urban Planning

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.



Libraries

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.

halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021