Multifamily housing will remain a robust market for A/E/C companies heading into 2020, according to the most recent results of PSMJ’s Quarterly Market Forecast (QMF) survey. For the third quarter of 2019, the survey found that less than 9% of the nearly 100 respondents doing multifamily work reported a decrease in proposal activity compared with the prior quarter, while more than 54% saw an increase.
The Multifamily market’s third quarter Net Plus/Minus Index (NPMI) of 46% marked the 31st consecutive quarter that the submarket exceeded an NPMI of 40%. The last time it was below that level was the third quarter of 2011.
PSMJ’s NPMI measures the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease, quarter over quarter. PSMJ has been using the QMF as a predictor of the A/E/C industry’s health since 2003, tracking 12 major markets and 58 submarkets every three months. The company chose proposal activity to gauge the industry’s long-term outlook because it is among the earliest stages of the project lifecycle. Approximately 200 firms participate in the survey each quarter.
The Senior and Assisted Living submarket also performed well with a third-quarter NPMI of 49%. Only 4 of the 86 responding firms working in the senior care submarket reported declining proposal activity. The Senior/Assisted Living market has also been a consistently stellar performer in the QMF. Its NPMI hasn’t dipped below 50% since the fourth quarter of 2012.
“Multifamily and Senior/Assisted Living have been two of the hottest markets for proposal activity for quite some time, not only among the Housing submarkets, but throughout all 58 submarkets,” says PSMJ’s Greg Hart, a consultant who also oversees the QMF. “It is remarkable that both have seen such steady proposal growth for so long. Very few submarkets have been this consistently strong throughout the 16-year history of our survey.”
Housing (all submarkets) recorded an NPMI of 40% in the third quarter, a potentially noteworthy drop from the 59% recorded in the second quarter. After ranking the second-highest of the 12 major markets measured in the second quarter, Housing fell completely out of the top five in the third quarter. Transportation (49%) and Healthcare (46%) were tops among major markets.
Among the other Housing submarkets, Condominiums recorded a respectable NPMI of 24%, its sixth consecutive quarter in the mid-20% range. Individual single-family homes (15%) and subdivisions (8%) trailed the Housing field in the third quarter, falling markedly from 25% and 23%, respectively, in the second quarter. PSMJ Director and Senior Consultant Dave Burstein, PE, notes that the results are still positive, if potentially troubling in the longer term. He adds that lower mortgage interest rates on the horizon are likely to spur a rebound in the single-family and subdivision subsectors.
PSMJ Resources, Inc., based in Newton, Massachusetts, is a publishing, executive education, and advisory company dedicated to serving architecture, engineering and construction (A/E/C) organizations worldwide.
Related Stories
Market Data | Apr 1, 2024
Nonresidential construction spending dips 1.0% in February, reaches $1.179 trillion
National nonresidential construction spending declined 1.0% in February, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.179 trillion.
Affordable Housing | Apr 1, 2024
Biden Administration considers ways to influence local housing regulations
The Biden Administration is considering how to spur more affordable housing construction with strategies to influence reform of local housing regulations.
Affordable Housing | Apr 1, 2024
Chicago voters nix ‘mansion tax’ to fund efforts to reduce homelessness
Chicago voters in March rejected a proposed “mansion tax” that would have funded efforts to reduce homelessness in the city.
Standards | Apr 1, 2024
New technical bulletin covers window opening control devices
A new technical bulletin clarifies the definition of a window opening control device (WOCD) to promote greater understanding of the role of WOCDs and provide an understanding of a WOCD’s function.
Adaptive Reuse | Mar 30, 2024
Hotel vs. office: Different challenges in commercial to residential conversions
In the midst of a national housing shortage, developers are examining the viability of commercial to residential conversions as a solution to both problems.
Sustainability | Mar 29, 2024
Demystifying carbon offsets vs direct reductions
Chris Forney, Principal, Brightworks Sustainability, and Rob Atkinson, Senior Project Manager, IA Interior Architects, share the misconceptions about carbon offsets and identify opportunities for realizing a carbon-neutral building portfolio.
Reconstruction & Renovation | Mar 28, 2024
Longwood Gardens reimagines its horticulture experience with 17-acre conservatory
Longwood Gardens announced this week that Longwood Reimagined: A New Garden Experience, the most ambitious revitalization in a century of America’s greatest center for horticultural display, will open to the public on November 22, 2024.
Office Buildings | Mar 27, 2024
A new Singapore office campus inaugurates the Jurong Innovation District, a business park located in a tropical rainforest
Surbana Jurong, an urban, infrastructure and managed services consulting firm, recently opened its new headquarters in Singapore. Surbana Jurong Campus inaugurates the Jurong Innovation District, a business park set in a tropical rainforest.
Cultural Facilities | Mar 27, 2024
Kansas City’s new Sobela Ocean Aquarium home to nearly 8,000 animals in 34 habitats
Kansas City’s new Sobela Ocean Aquarium is a world-class facility home to nearly 8,000 animals in 34 habitats ranging from small tanks to a giant 400,000-gallon shark tank.
Market Data | Mar 26, 2024
Architecture firm billings see modest easing in February
Architecture firm billings continued to decline in February, with an AIA/Deltek Architecture Billings Index (ABI) score of 49.5 for the month. However, February’s score marks the most modest easing in billings since July 2023 and suggests that the recent slowdown may be receding.
