AEC Tech News #158

AEC Eyes Strong 2006

Business will increase this year, as will the effort to promote sustainable design

For the first time in several years, year-end economic indicators point toward a healthy construction economy and increased employment opportunities for architects and design professionals. This view of 2006 seems to be the consensus of economists and observers of the AEC industry.

AIA Architecture Billings Index
AIA's (American Institute of Architects) Architecture Billings Index remained strong at the end of 2005, according to an article in the December 19, 2005, edition of the AIArchitect newsletter, indicating continuing recovery from the recent recession. Architectural firms report that business has been improving each month over the past year, pointing to a strong market for nonresidential construction in 2006. (Architectural billings typically lead construction activity by about six months.)

Kermit Baker, Hon. AIA and AIA chief economist, reports that inquiries for new work also continue to increase over preceding years, indicating that architectural design firms should also have a good year in 2006.

Firms report they expect slightly higher job turnover rates, as increasing workloads demand more staff and invite competition for workers among design firms. This is especially true for lower-paid positions and those in larger firms. Turnover rates are also higher in firms that concentrate on commercial and industrial design work.

PSMJ Reports Moderate Growth Rate
The annual A/E Financial Performance Survey by PSMJ Resources provides another positive indicator for the 2006 architectural business. A PSMJ press release reports on the annual Firm Size Change Index during 2005, which showed a moderate overall positive growth rate for the first time in several years. Average staff size among architectural firms had been essentially flat for several years.

This growth in firm size is attributed to the positive outlook for the building economy as firms began to increase staff size in response to this trend. In recent years, the growth rate had been less than half that experienced in the late 1980s, reflecting the recession that began in the early 1990s. PSMJ also reports an increase in staff turnover in larger firms.

PSMJ publishes several well-respected annual reports on the design industries, including the 2005 A/E Staff and State Report, which can be purchased on its Web site.

AIA Aims to Reduce Building Energy Use
In another architectural trend in the making, AIA announced an initiative to reduce by 50% the current fossil fuels energy consumption in new and reconstructed buildings by 2010 and to further reduce energy use by at least 10% each of the subsequent five years. AIA aims to reach this goal through improved education of architects in sustainability techniques and education of clients about the advantages and necessity of reducing building energy consumption.

Buildings account for 48% of energy consumption in the United States and for a large percentage of U.S. greenhouse gas emissions, according to R.K. Stewart, FAIA, facilitator of the AIA Sustainability Summit Task Force. Architects must accept their role in energy use in the built environment and commit to achieve measurable improvements over the coming years, Stewart says.

AIA will support the creation of standards and rating systems to ensure these objectives are met. This will require a concerted effort among all members of the building design community over the next 10-15 years, it reports, and the group will work with other organizations to develop and promote better sustainability practices. AIA's High Performance Building Position Statements document (PDF) is available on its Web site.