Pandemic Survey of AEC Firms Reveals Mixed Impact (Appleseed Strategy)

The national consulting group Appleseed Strategy has unveiled the results of a U.S. business survey of AEC firms to understand the impact of the Covid-19 pandemic on this service sector.

Querying a sample of 22 primarily coastal firms in architecture, engineering, landscape architecture and other consulting services ‚ÄĒ ranging in size from 5 people to 1,000-plus ‚ÄĒ Appleseed Strategy paints a vivid and decidedly mixed picture of the impact that the global pandemic has had on AEC companies.

“All of the survey participants expect changes across building types as a result of the pandemic,¬†some near-term, others lasting,‚ÄĚ says Kacey Clagett, LEED AP BD+C, a principal of Appleseed Strategy. ‚ÄúThese shifts are affecting workplace¬†standards, the reconfiguring of dwelling units and amenities for multifamily construction, as well as upticks in logistics and¬†distribution facilities ‚ÄĒ and deep troubles for those firms with exposure to the retail and hospitality markets.”The authoritative findings of the survey from last month include:

  • Over 90% were experiencing projects being shut down or placed on hold at the end of immediate¬†milestones.
  • Of the 22 firms, only one was¬†not¬†predicting a 20 – 30% drop in workload.
  • Nonetheless, approximately one-third of participants noted that they are still receiving requests for¬†proposals and interviews.

Interestingly, Appleseed Strategy found that opportunistic commercial development is robust, with clients testing out new developments and acquisitions or trying to capture better positioning and pricing for work already underway.

“The pandemic is expected to accelerate ongoing trends in real estate toward further vertical integration of¬†construction services and reliance on building information technologies and modular construction,‚ÄĚ adds Clagett. “Most¬†predict that while labor costs will drop with the catastrophic loss of jobs from the pandemic, materials costs¬†may go higher.”

A link to the full report is available here.

Follow-on findings from the firm survey interviews taking place this month will be issued by early June, adds the consultancy. The next report will also feature independent market intelligence compiled by Appleseed Strategy and Tiany Galaskas, a national market research expert for design and construction. For more details and to learn about Appleseed Strategy, call 510-717-7566 or email kacey.clagett@appleseedstrategy.com.