ZweigWhite Report Details 2007 Industry Outlook for Design and Construction Firms

-- Consulting-Specifying Engineer, 1/17/2007 2:08:00 PM

Health care, higher education and water/wastewater are expected to be the largest markets for design and construction firms this year, according to the “2007 AEC Industry Outlook: Strategy and Insight for Design & Construction Firms,” from Natick, Mass.-based ZweigWhite.

The report also said that parks, recreation, government and financial markets are expected to struggle. In recent years, the architecture, engineering and construction (AEC) business has outperformed the U.S. economy, and 55% of the firm leaders surveyed in conjunction with the report said they are optimistic about the industry’s performance heading into 2007 and expect AEC to outperform the U.S. economy in 2007, the report said.

Based on market analysis, the report identifies 10 markets to watch in 2007. These include health care, higher education, water/wastewater, highways and bridges, and power and energy.

Health Care. Increases in health insurance costs are beneficial for firms in the health care market. These increases result in additional capital that is available for health care projects.

Higher Education. Higher education construction is at record levels. Colleges and universities are upgrading and expanding residence halls and educational facilities. In addition, changes to state budgets should improve public funding for capital projects.

Water/Wastewater. This is a strong sector due to sprawling populations, water scarcity, federal and state regulations, and aging infrastructure.

Highways and Bridges. Highway and bridge projects should continue from the ongoing success of SAFETEA-LU. Owners are still involved with demand in the market due to the nearly two years that passed before a long-term surface transportation bill was passed.

Power and Energy. Sharp increases in energy costs for the past two years have resulted in increased revenues and profits to invest in major infrastructure projects.