flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

PSMJ report: The fed’s wrecking ball is hitting the private construction sector

Architects

PSMJ report: The fed’s wrecking ball is hitting the private construction sector

Inflation may be starting to show some signs of cooling, but the fed isn’t backing down anytime soon.


By PSMJ | January 23, 2023
PSMJ report: The fed’s wrecking ball is hitting the private construction sector
Photo: Pixabay

Inflation may be starting to show some signs of cooling, but the Fed isn’t backing down anytime soon and the impact is becoming more noticeable in the architecture, engineering, and construction (A/E/C) space. The overall A/E/C outlook continues a downward trend and this is driven largely by the freefall happening in key private-sector markets.

PSMJ’s latest Quarterly Market Forecast survey of 115 A/E/C executives (collected between December 28, 2022 and January 10, 2023) revealed an overall proposal activity Net Plus/Minus Index (NPMI) value of just 8.0. Any NPMI value above zero indicates that more respondents are seeing an increase in proposal activity compared to the prior quarter (+100 indicates all respondents are seeing an increase in proposal activity, -100 indicates all respondents are seeing a decrease in proposal activity). Since proposal activity is a leading indicator for backlog, revenue, and — ultimately — cash flow, the latest NPMI values provide a valuable glimpse into cash flow over the next 12 to 24 months.

While still barely clinging on to positive territory, this latest index value marks a continued decline from the record-setting 2022 Q1 value of 60.2 and a significant slide from the previous quarter value of 25.0. According to PSMJ President Gregory Hart, A/E/C firms’ marketing horsepower will be tested in the months ahead. “Huge streams of funding to support infrastructure projects are keeping the public-sector markets in pretty good shape,” states Hart. “But, if you have significant exposure to the private land development markets in your revenue mix, now is the time to act to avoid significant trouble ahead.”

Any index value greater than 20 generally indicates a healthy market. Three of the 12 client markets are now below that threshold and the two commercial markets have entered negative territory.

The Top 5 Markets for the 4th Quarter of 2022 are:

  • Transportation: 62.9
  • Heavy Industry: 57.9
  • Water/Wastewater: 57.1
  • Energy/Utilities: 55.2
  • Environmental: 46.2

The following chart compares the NPMI values in each client to the same period last year:

PSMJ report: The fed’s wrecking ball is hitting the private construction sector

Related Stories

| Aug 29, 2014

Phifer and Partners to design 'transparent' Museum of Modern Art in Warsaw

The design includes a stage that opens onto the city's Parade Square, so anyone passing by will be able to see performances. 

| Aug 29, 2014

China Syndrome: How long will U.S. firms keep milking the Middle Kingdom?

U.S. architecture and engineering firms like Goettsch Partners have been enjoying full employment in China. But will there come a point when Chinese officials—and Chinese designers—say, We can handle this? BD+C's Robert Cassidy digs into this issue.  

| Aug 28, 2014

Arthur Platt and Julie Engh to lead AIANY architectural boat tour at BD+C Under40 Leadership Summit

The tour, which will circumnavigate Manhattan, will provide U40 Summit attendees with information about the history and architectural details of numerous buildings visible from the 1920s-era yacht.

| Aug 28, 2014

USGBC, American Chemistry Council join forces to advance LEED

The groups will apply technical and science-based approaches to the LEED green building program.

| Aug 27, 2014

Turkish government orders demolition of residential towers in Istanbul

Citing negative effects to a world heritage site, the Turkish central government has ruled that the recently completed OnaltiDokuz Residence towers must be demolished. 

| Aug 27, 2014

Ranked: Top sports facility sector AEC firms [2014 Giants 300 Report]

Populous, AECOM, and Turner head BD+C's rankings of the nation's largest sports facility design and construction firms, as reported in the 2014 Giants 300 Report.

| Aug 27, 2014

Frank Lloyd Wright’s Taliesin school of architecture faces accreditation loss

The Frank Lloyd School of Architecture may be stripped of its ability to confer Master of Architects students based on a revised by-law of the Higher Learning Commission.

| Aug 27, 2014

Survey of NCAA athletic directors reveals strong demand for new facilities, fan amenities

More than 80% of college athletic directors plan to make significant investments in facilities over the next five years to target potential recruits and spectators, according to a new survey by AECOM and Ohio University.

| Aug 27, 2014

Study looks at lessons from involving children in K-12 school design

A study examining what architects can learn from children, especially during the design process, is being carried out through the University of Sheffield's school of architecture. 

| Aug 27, 2014

Designs for community-based workspace in Carlsbad unveiled

Cruzan announced make, a 175,000-square-foot office redevelopment project on the coast of Carlsbad, Calif. Cruzan will usher this next generation of community-based, integrated workspace into existence in fall 2014.

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