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
| Dec 9, 2012
Modular classroom building makes the grade
SAGE modular classroom opens eyes, minds at Greenbuild 2012.
| Dec 9, 2012
14 great solutions
Welcome to the third installment of Building Design+Construction’s “Great Solutions,” highlighting 14 innovative technologies and products that you can put to work in your next project.
| Dec 9, 2012
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.
| Dec 7, 2012
Structural glazing sealant protects solar-rooftop stadium in Taiwan
Designers of the Kaohsiung World Games Main Stadium in Gaoxiong, Taiwan, powered by almost 9,000 rooftop solar panels, required an effective panel fixing design offering optimum energy transfer rate, plus thermal and weathertight performance. Dow Corning specialists recommended a four-sided structural sealant solution featuring Dow Corning 983 Structural Glazing Sealant.
| Dec 6, 2012
Ziegler Cooper names Soto as Director of Design, Broadens Design Capabilities
Soto will oversee design efforts, bringing a high level of quality and problem solving capabilities through active engagement with clients and studios firm wide.
| Dec 5, 2012
Gilbane publishes Winter 2012 construction economic report
Report outlines impact of recent events; predicts continued movement, while slow, toward recovery.
| Dec 5, 2012
Gehry-designed New York City tower receives Emporis Skyscraper Award
8 Spruce Street is now the third New York tower to win the Emporis Skyscraper Award.
| Dec 4, 2012
MKK’s Denver Human Services Eastside Building wins ACEC Excellence Award
MKK provided mechanical, plumbing and fire protection consulting services on this LEED-NC Gold project.
| Dec 4, 2012
Thornton Tomasetti opens new office in São Paulo, Brazil
The move to São Paulo is strategic and timely, as the country continues preparations for the 2014 World Cup and 2016 Olympic Games in Rio de Janeiro.
