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
| Nov 20, 2012
PC Construction completes Juniper Hall at Champlain College
Juniper Hall is on track for LEED Gold certification from the U.S. Green Building Council.
| Nov 14, 2012
U.S. Green Building Council partners with Pearson
Partnership will help further USGBC’s mission by advancing green building education
| Nov 14, 2012
U.S. Green Building Council announces grant from Google to catalyze transformation of building materials industry and indoor health
Focus is on healthy building materials to promote indoor environmental quality and human health
| Nov 14, 2012
USGBC's Greenbuild International Conference and Expo kicks off in San Francisco
7,000 members of the green building industry convene for opening plenary headlined by "Morning Joe" co-hosts Mika Brzezinksi and Joe Scarborough
| Nov 13, 2012
Have colleges + universities gone too far with "Quality of Life" buildings?
We'd like your input - recent projects, photo/s, renderings, and expert insight - on an important article we're working on for our Jan 2013 issue
| Nov 13, 2012
Turner Construction’s green building Market Barometer reveals new findings on green building and certification
Respondents indicated a widespread commitment to sustainable practices
| Nov 13, 2012
Soladigm announces new glass product, changes company name to View, Inc.
Glass is installed and operating at W San Francisco adjacent to the 2012 Greenbuild show
| Nov 13, 2012
Sto Corp. announces appointment of new CMO
Bottema will be responsible for all corporate marketing, product management and sales activities.
| Nov 13, 2012
2012 LEED for Homes Award recipients announced
USGBC recognizes excellence in the green residential building community at its Greenbuild Conference & Expo in San Francisco
| Nov 12, 2012
PCI Skanska celebrates 40-year anniversary
Since its creation, PCI Skanska has provided EPC services to clients for more than 40 years.
