A/E Billing Rates Rise, but Slowly

Despite recent economic challenges, hourly design firm billing rates have increased 10% over the last three years, according to a recent survey by the Natick, Mass.-based industry consulting firm ZweigWhite.

While hourly billing rates continue to rise, the increase has leveled off. Last year's survey indicated a 12% increase over the previous three-year period, and the 2001 survey reported a 12.5% increase.

"While it's encouraging to see that billing rates increased, the lower amount of the increase compared to previous years may reflect the economic and competitive pressures being felt at the time," says Ian Rusk, ZweigWhite's CFO and a financial consultant to the industry. "Unless the economy improves significantly in the near term, I would not be surprised to see even smaller billing rate increases this year."

"We are seeing more and more firms struggling with declining revenue, profits and cash flow, and it's taking a toll on the principals of those firms," adds Mark C. Zweig, ZweigWhite's president/CEO.

ZweigWhite also reported that construction spending rose in January for the fifth consecutive month. According to the U.S. Census Bureau, total put-in-place construction was estimated at a seasonally adjusted rate of $877.9 billion—1.7% above the revised December estimate. While residential spending, a major catalyst for the strong growth, was up 4.1% from December, non-residential construction continued to fall, declining 0.3% to a seasonally adjusted annual rate of $157.9 billion.