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
| Aug 11, 2010
Luxury Hotel required faceted design
Goettsch Partners, Chicago, designed a new five-star, 214-room hotel for the King Abdullah Financial District (KAFD) in Riyadh, Saudi Arabia. The design-build project, with Saudi Oger Ltd. as contractor and Rayadah Investment Co. as developer, has a three-story podium supporting a 17-story glass tower with a nine-story opening that allows light to penetrate the mass of the building.
| Aug 11, 2010
Three Schools checking into L.A.'s Ambassador Hotel site
Pasadena-based Gonzalez Goodale Architects is designing three new schools for Los Angeles Unified School District's Central Wilshire District. The $400 million campus, located on the site of the former Ambassador Hotel, will house a K-5 elementary school, a middle school, a high school, a shared recreation facility (including soccer field, 25-meter swimming pool, two gymnasiums), and a new publ...
| Aug 11, 2010
New Jersey's high-tech landscaping facility
Designed to enhance the use of science and technology in Bergen County Special Services' landscaping programs, the new single-story facility at the technical school's Paramus campus will have 7,950 sf of classroom space, a 1,000-sf greenhouse (able to replicate different environments, such as rainforest, desert, forest, and tundra), and 5,000 sf of outside landscaping and gardening space.
| Aug 11, 2010
U.S. firm designing massive Taiwan project
MulvannyG2 Architecture is designing one of Taipei, Taiwan's largest urban redevelopment projects. The Bellevue, Wash., firm is working with developer The Global Team Group to create Aquapearl, a mixed-use complex that's part of the Taipei government's "Good Looking Taipei 2010" initiative to spur redevelopment of the city's Songjian District.
| Aug 11, 2010
Florida mixed-use complex includes retail, residential
The $325 million Atlantic Plaza II lifestyle center will be built on 8.5 acres in Delray Beach, Fla. Designed by Vander Ploeg & Associates, Boca Raton, the complex will include six buildings ranging from three to five stories and have 182,000 sf of restaurant and retail space. An additional 106,000 sf of Class A office space and a residential component including 197 apartments, townhouses, ...
| Aug 11, 2010
Restoration gives new life to New Formalism icon
The $30 million upgrade, restoration, and expansion of the Mark Taper Forum in Los Angeles was completed by the team of Rios Clementi Hale Studios (architect), Harley Ellis Devereaux (executive architect/MEP), KPFF (structural engineer), and Taisei Construction (GC). Work on the Welton Becket-designed 1967 complex included an overhaul of the auditorium, lighting, and acoustics.
| Aug 11, 2010
Best AEC Firms to Work For
2006 FreemanWhite Hnedak Bobo Group McCarthy Building Companies, Inc. Shawmut Design and Construction Walter P Moore 2007 Anshen+Allen Arup Bovis Lend Lease Cannon Design Jones Lang LaSalle Perkins+Will SmithGroup SSOE, Inc. Timothy Haahs & Associates, Inc. 2008 Gilbane Building Co. HDR KJWW Engineering Consultants Lord, Aeck & Sargent Mark G.
| Aug 11, 2010
High-Performance Workplaces
Building Teams around the world are finding that the workplace is changing radically, leading owners and tenants to reinvent corporate office buildings to compete more effectively on a global scale. The good news is that this means more renovation and reconstruction work at a time when new construction has stalled to a dribble.
| Aug 11, 2010
Great Solutions: Business Management
22. Commercial Properties Repositioned for University USE Tocci Building Companies is finding success in repositioning commercial properties for university use, and it expects the trend to continue. The firm's Capital Cove project in Providence, R.I., for instance, was originally designed by Elkus Manfredi (with design continued by HDS Architects) to be a mixed-use complex with private, market-...
| Aug 11, 2010
Nurturing the Community
The best seat in the house at the new Seahawks Stadium in Seattle isn't on the 50-yard line. It's in the southeast corner, at the very top of the upper bowl. "From there you have a corner-to-corner view of the field and an inspiring grasp of the surrounding city," says Kelly Kerns, project leader with architect/engineer Ellerbe Becket, Kansas City, Mo.
