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Design-Build projects should continue to take bigger shares of construction spending pie over next five years

Market Data

Design-Build projects should continue to take bigger shares of construction spending pie over next five years

FMI’s new study finds collaboration and creativity are major reasons why owners and AEC firms prefer this delivery method.

By John Caulfield, Senior Editor | September 28, 2021
Design-Build construction in place will gain market share through 2025, according to a new FMI study. Charts credit: FMI
A new FMI study anticipates that design-build delivery projects will capture nearly half of all construction spending by 2025. Charts: FMI

Design-build delivered projects will account for nearly half of all construction spending by 2025, according to the consulting and investment firm FMI’s latest market research on design-built utilization. 

FMI’s research for its 50-page report is based on a survey of 279 industry stakeholders and 46 interviews. FMI conducted the study in partnership with the Design-Build Institute of America (DBIA), and piggybacks on research in 2018 that confirmed design-build was no longer just an alternative delivery method, but one that had been embraced by a growing number of owner-developers and their AEC partners.

FMI’s latest report, which it releases today, forecasts that spending for design-build construction put in place will grow at a compound annual rate of 7.6% over the years 2021 through 2025, and hit $405.7 billion in 2025, or 47% of total construction spending that year, vs 42% of the total in 2021.

FMI expects the five-year rate of growth to be higher than the national average in the West South Central, South Atlantic, Middle Atlantic, and New England regions.

Design-Build delivery is popular in the South and New England.
Design-Build delivery is expected to grow faster in certain parts of the country.


Over the forecast years, FMI estimates that the aggregate spending on projects delivered via design-build will be $1.732 trillion, or 46.2% of the $3.742 trillion spent on all construction projects. Highway and street projects will account for 16% of the design-build spending, followed by Education (15%), Manufacturing (13%) and Commercial and Office (12% each). Spending on design-build water/wastewater projects is expected to show the highest annual growth rate—11.1%—although that sector will represent only 5% of total design-build project spending over the forecast years.

Education and Manufacturing are sectors that lend themselves to Design-Build project delivery.
Education and manufacturing are sectors where design-build delivery is expected to gain ground.

Design-build rated highest across all project delivery methods, with 77% of the report’s respondents having “very good” or “excellent” experiences with the method. The 2021 study found that 60% of respondents identified “owner goals and objectives” as an influence on their choice of delivery methods, following by 50% who identified a project’s complexity and innovation, and 46% who cited “delivery schedule” or “contractor experience.”



Over past five years, Design-Build has increased market share.
Design-Build delivery has gained greater acceptance over the last five years.

Seventy-seven percent of the study’s respondents thought that the design-build delivery method would increase over the next five years. “We have seen significantly more design-build work,” stated one respondent quoted in the report. “Virtually everything in our geography is going design-build,” said another.

Conversely, respondents with less favorable experiences with design-build delivery noted that some owners still see this method as a way of transferring risk to the building team, and underestimate the commitment needed to make this delivery method work.

Most respondents, however, saw myriad benefits in design-build. For example, 76% of architects, designers, and engineers, and 89% of GCs and CMs, cited increased collaboration and creativity. Greater project and design control was cited by 88% of GCs/CMs and 84% of specialty trade contractors.  GCs/CMs (who represented 31% of the study’s respondents) like the opportunities to innovate that design-build methods afford them, as do 90% of owner’s reps.

Nearly half—47%—of organizations that responded to FMI’s survey use fixed price/lump sum contracts for their design-build projects, compared to 39% that use guaranteed max price contracts.

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