Coming off a record-setting year for the nonresidential construction industry (more than $760 billion was spent on new construction and renovation work nationwide last year), AEC firm leaders should be brimming with confidence over the growth potential for their firms heading into 2019. The arrow is pointing up for nearly all building sectors, construction backlogs remain healthy, and architecture firms continue to see strong demand for their design services, according to AIA and ABC data.
Yet despite the positive indicators for the market, AEC professionals remain largely cautious when it comes to growth prospects for 2019. In October, BD+C surveyed 314 readers about their thoughts on a variety of issues: materials prices, bid prices, obstacles to growth, emerging opportunities, etc. Only slightly more than half (56.0%) of industry professionals expect higher revenue for their firm in 2018 compared to last year. More surprisingly, 13.4% are forecasting a decrease in revenue.
And their forecast for 2019 isnât much rosier: 54.7% expect revenue to increase, 8.7% call for a drop, and 36.7% predict flat revenue this year. This is a markedly different sentiment than last yearâs respondents, who were much more upbeat with their forecasts for the upcoming year: 62.0% predicted revenue to rise and only 6.1% called for it to drop.
When asked about their top concerns for 2019, the largest number of respondents cited âgeneral economic conditionsâ (52.7%) as a key issue, followed by âcompetition from other firmsâ (41.0%) and âprice increases in materials and servicesâ (39.0%). In fact, nearly 90% of respondents anticipate construction materials prices to rise in 2019. Thatâs up from 86% in last yearâs survey of BD+C readers.
Â
See Also:Â And then there were two: HQ2 sites, in hindsight, seemed obvious
Â
To help keep their project pipelines full through 2019, AEC firms are focusing on a number of business development strategies heading into this year. Selective hires (44.1%) and marketing/public relations efforts (42.2%) top the list, followed by investments in technology (39.0%), staff training/education (35.9%), and new services/business opportunities (29.2%).
Healthcare facilities and multifamily housing head the list of the hottest sectors heading into 2019, according to survey respondents. More than half (52.5%) indicated that the prospects for healthcare/hospital work were either âexcellentâ or âgoodâ for 2019; 52.4% said the same for multifamily housing work. Other strong building sectors: senior/assisted living facilities (51.9%), office interiors/fitouts (46.9%), industrial/warehouse buildings (42.7%), hotel/hospitality developments (39.7%), university facilities (38.2%), government/military buildings (37.5%), and office buildings (37.4).
Related Stories
Museums | Jun 28, 2022
The California Science Center breaks grounds on its Air and Space Center
The California Science Centerâa hands-on science center in Los Angelesârecently broke ground on its Samuel Oschin Air and Space Center.
Contractors | Jun 27, 2022
Reverse mentorship: A model for the future of the construction workforce
Reverse mentorship can help seasoned professionals develop new skills, stay connected with younger generations, and gain future-forward insights for life and business.
Building Team | Jun 27, 2022
Chapel of St. Ignatius by Steven Holl Architects receives AIAâs twenty-five year award
The American Institute of Architects (AIA) is honoring the Chapel of St. Ignatius in Seattle, designed by Steven Holl Architects, with its Twenty-five Year Award.
Green | Jun 22, 2022
The business case for passive house multifamily
A trio of Passive House experts talk about the true costs and benefits of passive house design and construction for multifamily projects.Â
Building Team | Jun 22, 2022
Design for new San Clemente Marine Safety Headquarters would create new public plaza
A proposed design by HMC Architects for a new San Clemente Marine Safety Headquarters makes creative use of the seaside topography of the Pacific Coast.
Augmented Reality | Jun 22, 2022
Not just for POKĂMON GO anymore: how augmented reality is transforming architecture
By solving a long-standing communication problem, Augmented Reality (AR) is poised to make architecture quicker, nimbler, and more cost effective.
Healthcare Facilities | Jun 22, 2022
Arizona State Universityâs Health Futures Center: A new home for medical tech innovation
In Phoenix, the Arizona State University (ASU) has constructed its Health Futures Centerâexpanding the schoolâs impact as a research institution emphasizing medical technology acceleration and innovation, entrepreneurship, and healthcare education.
Market Data | Jun 22, 2022
Architecture Billings Index slows but remains strong
Architecture firms reported increasing demand for design services in May, according to a new report today from The American Institute of Architects (AIA).
Green | Jun 22, 2022
Worldâs largest commercial Living Building opens in Portland, Ore.
The worldâs largest commercial Living Building recently opened in Portland, Ore.
Multifamily Housing | Jun 21, 2022
Two birds, one solution: Can we solve urban last-mile distribution and housing challenges at the same time?
When it comes to the development of both multifamily housing and last-mile distribution centers, particularly in metropolitan environments, each presents its own series of challenges and hurdles. One solution: single-use structures.
