Industry Viewpoint

40 is the New 30

Don’t worry. I’m not going to start sharing my views with you on the human body and aging. If I did, that presentation would quickly turn into a list of new aches and pains, more frequent doctor’s visits, and uncomfortable new exploratory procedures looming on the horizon. I realize it’s best to leave these discussions to the medical experts or share them with my own family members — that is, if they’re even willing to listen.

I will, however, share some interesting thoughts with you this month that do revolve around the number 40. Last year marked a milestone for our annual electrical design firms list. Although we’d run the list for the last 10 years, we finally reached our goal of listing the top firms by electrical revenue only. This was a difficult task, due to the fact that many firms’ accounting departments don’t break out electrical revenue separately. So we were happy with securing 30 firms for our new more specific list. This year marked an even greater achievement. Thanks to the gracious participation of the highest revenue producing electrical design firms that perform work in this country — and some friendly harassment tactics by myself and my managing editor — we’re proud to present this year’s Top 40 Electrical Design Firm’s Listing article, starting on page 20. Our proprietary survey results reveal this energetic group of players racked up a respectable $1.35 billion in electrical design services revenue in 2012 — not too bad for a period defined as a slow recovery, huh?

Although 72.5% of the firms characterized last year’s business climate as “fair,” three-quarters of them met or exceeded their revenue expectations for the year. It’s also encouraging to see that 30 of the 40 firms are projecting even higher revenue totals this year, coupled with an increase in backlog activity. The successful firms on this year’s list took advantage of strong activity in the educational/institutional, health-care, and power market segments. In addition, most firms on the list noted the value of being involved in “green” work or energy-efficient projects.

As these firms look to the future, they see good things. Helping building owners save energy and reduce operating costs is a high priority right now. Stricter building codes and standards, coupled with new federal and state mandates, will continue to drive design plans and equipment purchases on most new projects. These firms are also showing optimism with regard to the commercial and industrial market segments.

Based on projections shown in FMI’s 1st Quarter 2013 Construction Outlook Report, they have good reason to be bullish. FMI’s forecast for total construction-put-in-place in 2013 is still sitting at $918.9 billion, an increase of 8% over 2012 levels. They note the star of the show this year is going to be residential buildings. Of course, we all know this will quickly be followed by improved activity in the commercial market sector. FMI is also projecting solid growth in the lodging, office, and manufacturing sectors.

One area that piques my interest is the energy sector. With the recent boom in oil and gas projects taking place in the rich shale regions of this country, not only will this activity give rise to new heavy industrial type projects, but it will also boost activity in other markets — given the fact that these remote areas are in immediate need of new housing, retail, schools, roads, etc., to support a rapid rise in population. As noted by FMI, a greater focus on energy independence and lower energy prices across the country will also help make the United States more competitive in the global market. It will also entice more manufacturing to relocate to the United States. These factors should make all of us feel a little more optimistic about the future of construction. I know I do.

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