NEWTON, Massachusetts – Overall proposal activity for the month of April sank to a level unseen in the 17-year history of the PSMJ Resources Quarterly Market Forecast (QMF) survey of architecture, engineering and construction (A/E/C) firm leaders. The supplemental survey for just the month of April reported a Net Plus/Minus Index (NPMI) of -41%, which represents the difference between the percentage of firms that saw growth in overall proposal activity and those that saw a decrease.

PSMJ conducted the supplemental survey to assess the impact of the COVID-19 crisis; it was the first time the company has done a monthly survey of participants who usually provide answers based on quarterly results. Dating back to the inception of the QMF in 2003, the quarterly NPMI for all proposal activity was never lower than -33%, which occurred in the fourth quarter of 2008.

Public-sector markets generally held up better than private-sector and mixed markets. Among the 12 markets measured in the QMF, only water/wastewater was in positive territory with an NPMI of 5%. Energy/Utilities checked in at -3%, followed by Transportation (-6%), Healthcare (-8%) and Other Government Buildings (-15%). All five top-rated markets have representation from public-sector clients.

“Healthcare had been consistently at or near the top of our survey rankings, including in the prior two quarters,” said PSMJ consultant and survey manager Greg Hart. “However, with the current focus on COVID-19 occupying so much of the market’s resources, discretionary capital improvements are being delayed and even canceled.”

PSMJ’s Quarterly Market Forecast – Proposal Activity by Major Market
Proposal opportunities for the commercial markets continued to dwindle. The NPMI for Commercial Users sank sharply to -72% in April from -47% in the 1st Quarter survey, while the Commercial Developer market dropped slightly from -51% to -60%.

Environmental markets (-30%) reported a 25% drop in proposal activity as tangential commercial and residential markets slowed and the federal government indefinitely suspended enforcement of many environmental laws.

Housing (-27% down from +19%) and Education (-34% from -12%) continued to show substantial weakness from the COVID-19 crisis, as did Light Industry (-24% from -5%) and Heavy Industry (-23% from -17%).

The April supplemental survey did not include questions about the 58 submarkets measured in the quarterly surveys. PSMJ’s QMF has proven to be a solid predictor of construction market health for the A/E/C industry since its inception in 2003. The April supplemental survey drew 193 responses from the consistent group of hundreds of A/E/C firm leaders who regularly complete the quarterly survey.

For more information or to receive a copy of the full Quarterly Market Forecast April 2020 Supplementary Survey report, contact Jerry Guerra at 781-718-2403 or at jguerra@jagg-group.com.

About PSMJ: For more than 40 years, PSMJ Resources, Inc. has been recognized as the leading publishing, executive education, and advisory group devoted completely to improving the business performance of A/E/C organizations worldwide. http://www.psmj.com

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