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:
Related Stories
| Feb 18, 2013
Top 10 kitchen and bath design trends for 2013
Gray color schemes and transitional styles are among the top trends identified by more than 300 kitchen and bath design experts surveyed by the National Kitchen & Bath Association (NKBA).
| Feb 17, 2013
Suffolk University’s $62 million academic building gets the go-ahead
The Boston Redevelopment Authority board yesterday unanimously approved Suffolk University’s plans to move forward with a new campus building at 20 Somerset St. that will feature general-use and science classrooms, a light-filled cafeteria/function space, and indoor and outdoor lounging areas.
| Feb 14, 2013
5 radical trends in outpatient facility design
Building Design+Construction combed the healthcare design and construction sector to evaluate the latest developments in outpatient facility designs. Here are five trends to watch.
| Feb 14, 2013
Boxman Studios launches shipping container buildings division
Boxman Studios has launched a new division aimed at sustainable solutions for the Built Environment. The Boxman Studios Buildings Division will focus on the adaptive use of decommissioned shipping containers as architectural elements and even complete buildings.
Smart Buildings | Feb 14, 2013
Minneapolis joins energy benchmarking trend for commercial buildings
Minneapolis is the latest major metro to require large commercial buildings to benchmark and disclose their energy and water use.
| Feb 14, 2013
Peter Rutti named Director of Design of Westlake Reed Leskosky’s Phoenix studio
Peter W. Rutti, AIA, Associate Principal and Project Director of Westlake Reed Leskosky, has been appointed Director of Design of the Phoenix, Arizona studio of the nationally recognized architects, engineers, and technology designers. The announcement recognizes the design excellence, leadership, and continued growth of the national and international practice of the integrated design firm in the western region.
| Feb 14, 2013
Peter Bardwell named 2013 president of the American College of Healthcare Architects
The Board of Regents of the American College of Healthcare Architects (ACHA) has named Peter L. Bardwell, FAIA, FACHA of Columbus, Ohio as 2013 national President.
| Feb 13, 2013
Department store concept by OMA's Koolhaas, Alsaka draws inspiration from open-air Arab marketplaces
The Exhibition Hall, a retail concept planned in Kuwait City's 360° Mall, will meld cultural and commerce spaces in a series of galleries reminiscent of the long passages of the souq—traditional, open-air marketplaces found in Arab cities.
| Feb 13, 2013
China plans new car-free city
A new urban development near Chengdu, China, will provide new housing for ~80,000 people, surrounded by green space.
| Feb 13, 2013
Advanced urbanism is focus of new MIT research center
MIT Center for Advanced Urbanism will seek 21st Century planning solutions, starting with infrastructure design issues.
