Right about this same time last year, we reported the findings from our 2013 Top 40 Electrical Design Firms research project. The general consensus by most participants at this time was they had weathered the economic storm and were anticipating a modest recovery. Thirty-four of the 40 firms projected their electrical design service revenues would stay the same or improve throughout 2013 — nearly half projected revenue improvements of 6% or more. In hindsight, it looks like their crystal balls were pretty darn clear.
Our 2014 Top 40 Electrical Design Firm participants posted an impressive combined revenue figure of $1.808 billion — slightly more than a 34% improvement over last year’s total. The general theme that emerged from these power players was one of movement. Many projects were shifted from the backlog pile to the active pile. Growth markets included power (utilities/T&D), education/institution, health care, and transportation. This modest recovery produced three impressive statistics for our latest report.
• 80% of the firms met or exceeded revenue expectations
• 75% of the firms reported an increase in backlog of projects
• 55% of the firms added employees to the payroll
Although most firms on the list realized revenue gains from the prior year, the report wasn’t completely sunny. A few companies found themselves on the wrong side of the ledger, posting lower design revenue totals from the prior year. They attributed this shortfall to factors such as geography, the government shutdown, and dips in specific market segments they specialize in. One other factor that comes into play for a company from time to time is a very large project. Once a massive project comes to an end, it’s not always so easy to fill that void with a comparable project or a group of smaller projects.
Despite these few outliers, a quick look ahead for our Top 40 reveals more good news for the remainder of this year and into 2015-2016. Fifteen of the firms are forecasting revenue to increase by 6% or more. Twenty additional firms project their revenue to match their total in 2013 or grow by up to 5%. In addition, a whopping 90% of Top 40 firms expect their backlog to increase this year. Quite a few firms are also hiring now in anticipation of projected future growth. They want to position themselves with adequate capacity to easily take on new projects when they become available.
These forecasts should make us all feel good about the future business conditions we’ll see in the next few years. Read the Top 40 special report and find out what’s driving this growth.
