Top 10 business trends to watch in 2015
Engineering firms should watch these business and technology trends as we move into 2015.
Here are the top 10 business trends that you need to know going into 2015.
1. 2014 was a great year with a resurgent economy boosting profits of firms across the country. This will continue into 2015. Firms can't find enough talent quickly enough to meet demand-this simple equation will drive us toward a record profit year in 2015.
2. The big, unexpected story of 2014 was that firms in the transportation market had a strong year with many having record years. Lots of observers had worried about lack of funding. Transportation infrastructure can provide very high multipliers for mechanical, electrical, plumbing (MEP), and fire protection engineering firms-specifically in the niche areas of security and "smart systems."
3. The drop in oil prices is worrying for firms that have placed a big bet-either through acquisitions or key hires-in the mid-stream pipeline market. Those fears are unfounded. Oil prices will swing back this year.
4. Normalization of relations with Cuba will open up new market. Biggest beneficiaries will be firms in South Florida that have connections with Cuba.
5. Watch out for more Chinese and South American design and construction firms buying into the United States market.
6. A big concern for firms is finding talent. It's back to the pre-recession market for talent.
7. Mergers and acquisitions will have a record year in 2015 and will increase some 25% over 2014. The industry is at a tipping point form a consolidation perspective. High-performing firms in hot markets and geographies will command record valuations.
8. Watch for more and more firms who have traditionally generated business east of the Mississippi move into the West-following demand from population, infrastructure, and water issues.
9. Technology advances will continue to reduce the industry's need on "engineers"-and will allow the industry like never before to drive prices up more in line with the demand curve.
10. Firms will spend less and less on offices and baby boomer infrastructure and more on their brands and technology.
Mick Morrissey is managing principal of Morrissey Goodale LLC, a management consulting and research firm based in Newton, Mass., with offices in Phoenix and Denver, that serves the AEC industry exclusively. An engineer by training, Morrissey has assisted numerous MEP firms in the areas of strategy development and implementation, leadership development and transition, technical and professional talent recruitment, ownership transition, and mergers and acquisitions.