PSMJ Survey Predicts Continued Strength in 2019

The sluggish fourth-quarter results in 2018 suggested that the good times for the AEC industry might be coming to a close, but the PSMJ Quarterly Market Forecast (QMF) of proposal activity rebounded in the first quarter of 2019, allaying fears of a near-term downturn. At least temporarily.

After sliding 12 percentage points in the fourth quarter, to its lowest level in three years, the Net Plus/Minus Index (NPMI) for all markets climbed back to 40 percent in the period from January through March of 2019. The NPMI value is calculated by subtracting the number of participants who responded negatively from the number who responded positively to whether proposal activity has increased or decreased in the markets they serve.

The five hottest markets in Q1 were Water/Wastewater, Energy/Utilities, Environmental, Transportation and Healthcare. Industrial markets performed the worst in Q1, but still had respectable numbers.

The survey assesses the health of 12 major markets every quarter, (with data reaching back to the survey’s origin in 2003. The QMF also analyzes results from 58 submarkets, as well as regional strength. See the list of markets and submarkets below.

PSMJ chose to use proposal activity to gauge market health because it is the earliest indicator of project activity for firms in the AEC space. The historical data the QMF has captured for 16 years has provided invaluable advance notice to firms working in the industry.

The second-quarter QMF results will be extremely telling, as they are likely to indicate which of the prior two quarters was more illustrative of the market strength to come. Second quarter results should be available in July.

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List of QMF Markets and Submarkets:

Commercial Developers – Office Buildings (For Lease Facilities), Retail Buildings (For Lease Facilities), Warehouse Distribution (For Lease Facilities)

Commercial Users – Office Buildings, Hotels/Motels, Warehouse/Distribution Facilities, Restaurants, Call Centers/Data Facilities

Education – K-12 Schools, Laboratories, Support Facilities (Gyms, Dorms, Libraries, Etc.), Higher Education Facilities

Energy/Utilities – Renewable Energy (Wind, Solar, Hydroelectric, Wave), Telecom/Cable, Power Plants, Pipelines, Utility Distribution

Environmental – Waste Disposal (Landfills, Etc.), Wetlands Delineation, Site Clean-Up (Site Remediation, Nuclear, Etc.), Environmental Permitting (EIS, EIA, Etc.), Resource Management (Water Conservation, Etc.), Air Pollution, Site Characterization

Healthcare – Hospitals, Medical Offices, Continuing Care Facilities (Treatment Centers, Etc.), Medical Laboratories

Heavy Industry – Mining/Resource Extraction (Includes Oil Drilling), Primary Materials Manufacturing (Steel Mills, Refineries, Etc.), Petroleum Facilities, Product Manufacturing (Food, Auto, Etc.), Chemical Plants, Pharmaceutical Production

Housing – Condominiums, Multi-Family Housing, Single Family Development (Subdivisions), Single Family Property (Individual Houses), Senior and Assisted Living (Independent Living)

Light Industry – Warehouse/Distribution Facilities, Component Assembly/Fac. (Telecom/Consumer Goods), Repair Service Facilities

Other Government Buildings – Justice Facilities (Courts, Jails, Etc.), Public Recreation (Parks, Athletic Fields, Etc.), Public Safety (Fire Stations, Police Stations, Etc.), Sports Facilities (Arenas, Stadiums, Etc.)

Transportation – Roads, Airports, Bridges, Transportation Planning (Includes ITS), Rail, Traffic

Water/Wastewater – Water Supply, Wastewater Treatment, Water Distribution, Wastewater Reuse, Wastewater Collection, Water Treatment

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