The AIA’s (American Institute of Architects, Washington, aia.org) annual firm survey report, The Business of Architecture 2016, contains good news for architects, contractors, and facility owners.
Likely the best news is that non-residential-construction has almost returned to the level we enjoyed before the Great Recession. Nonresidential construction was estimated to be $450 billion by the end of 2015, just $50 billion short of the $500-billion peak in 2008. Coupled with that, net architecture-firm billings reached $28.4 billion in 2015, nearly matching the 2008 peak of $28.5 billion.
Unfortunately for smaller firms, the lion’s share of billings is still held by the larger firms, defined as having 50 or more employees. Those firms represent 51.3% of billings while firms with 10 to 49 employees hold 33.3% and 1-to-9-employee firms draw 15.4%. Small firms were at 16.5% in 2005.
Those numbers are nice, but the real question is whether firms are profitable. The answer to that is, generally, yes. In 2015, 21.5% of firms were reported to be very profitable. That number was 13.4% in 2011. In 2015, 27.6% were quite profitable and 41.2% modestly profitable. The 2015 figures were 22% and 45.4% for those two groups. Probably the best news is that firms reporting a loss dropped from 19.2% in 2011 to 9.7% in 2015.
Other items of interest:
- Diversity is on the rise with women as a percentage of the architectural staff increasing from 26% in 2005 to 31% in 2015. Women as a percentage of principals/partners increased from 16% to 20% in that time span. Minorities for those same categories increased from 16% to 21% and 8% to 11%.
- Multidisciplinary firms (firms offering architectural services and at least one additional design service) are increasing, rising from 29% in 2005 to 42% in 2015.
- Nearly a quarter (23%) of smaller firms have been founded since the Great Recession. That group is only exceeded by pre-1990 small firms (25%).
- Where is the work? The largest sector is institutional facilities, primarily healthcare and education, at 42.6%, followed by commercial/industrial at 34.5% and residential at 17.5%.
- Use of BIM for billable projects is increasing steadily for firms of all sizes: 7% (2005) to 28% (2015) for small firms, 10% to 72% for mid-sized firms, and 43% to 96% for large firms.
- Technology is prevalent with 90% using smart phones, 62% using cloud computing/information mobility, 61% using tablets, 11% 3D printing, and 8% 4D/5D modeling.