Halftime Adjustments

This year marks the 25th anniversary of CSE's annual Giants Report, our presentation of firm rankings based on M/E/P design revenue (p. 28). Before delving into our analysis of the market—which includes a breakdown of the economy by Daryl Delano, chief economist for Reed Economics (p. 32)—an understanding of the Giants rankings might prove helpful.

08/01/2002


This year marks the 25th anniversary of CSE's annual Giants Report, our presentation of firm rankings based on M/E/P design revenue (p. 28). Before delving into our analysis of the market—which includes a breakdown of the economy by Daryl Delano, chief economist for Reed Economics (p. 32)—an understanding of the Giants rankings might prove helpful.

With the rise of firm consolidation, an increase in design-build delivery systems and even firm diversification, it has become more difficult to identify what percentage of a firm's revenue can be attributed purely to M/E/P design.

For M/E firms that concentrate specifically on these areas, it is more straightforward. But for the large design/construct firms that dominate the front end of this year's ranking, M/E/P design may well account for a small fraction of total revenues.

For this reason, a greater effort was made in assembling this year's report to distinguish between M/E/P design and construction revenue, and to use only the former for purposes of the ranking. The effect has been a considerable amount of movement—both up and down—in the rankings that often renders comparison with a firm's M/E revenue and ranking from the previous year meaningless. But for comparison purposes, along with each firm's M/E revenue for this past fiscal/calendar year, we've also included the firm's total revenue for this year and last year.

In addition, we've tried to pull out some easily digestible statistics and numbers we hope may serve as a benchmark against your colleagues, or at the least, just interesting factoids to absorb.

But enough about the methodology. As is already apparent, this year's report has a football theme. Beside timeliness, the pigskin analogy—and a lion's share of the credit goes to our least football-crazed teammate, Associate Editor Barbara Horwitz—is appropriate in the sense that successful football coaches must make halftime adjustments when their game plan misfires. It's safe to say the 2001/2002 economy certainly proved a spoiler for the plans of most firms. That being said, a number of savvy companies have gone into the locker room, so to speak, and sketched out some counter-strategies to put points—or in this case cash—on the board.

In breaking down the "game film" that was the Giants survey, we found many firms have decided to run the ball in the second half. In other words, more glamourous, or quick-strike jobs are being abandoned in favor of more conservative, but plentiful work, notably in the biotech and pharmaceutical sectors. Firms are also expanding their service capabilities outside of pure engineering to keep the chains moving.

Being a fan of competitive football and smart engineering, I look forward to the rest of the game.





No comments