Design-Build Growth Continues Despite Market Challenges

When researchers at FMI first looked at design-build utilization in 2018, the news confirmed what many in the industry knew first-hand, design-build wasn't an "alternative delivery process" anymore. New market analysis forecasting the next five years (2021 to 2025) shows that is especially true today -- as impressive design-build growth will continue, despite unprecedented COVID-19 challenges

Design-build has seen increased usage in all sectors and regions of the United States, and the industry has also witnessed extraordinary project outcomes and innovation across all sectors. The FMI Design-Build Market research, conducted by FMI Senior Consultant Paul Trombitas, provides detailed geographic and sector data, including market analysis and projections. The full report is available online here, but following are some highlights:

Market Growth 

• Overall, design-build is anticipated to account for as much as 47% of construction spending in the assessed segments (nonresidential, highway/street, transportation and water/wastewater) by 2025.
• While national construction put in place spending for 2020 and 2021 saw a decline, design-build construction spending for these COVID years saw slight upticks of 1.3% in 2020 and an estimated .5% increase in 2021. It's projected that design-build will also outperform national growth rates by 1.6% over the 2021-2025 window delivering $1.7 trillion in construction in the assessed segments during the same time frame.
• Design-build spending in highway/street, education and manufacturing represents the greatest percentage of design-build construction spending by segment over the 2021 to 2025 period.
• The West South Central (8.8%), South Atlantic (8.6%) and Middle Atlantic (8.2%) census divisions are anticipated to yield the highest annual growth rates.
• Design-build spending is anticipated to grow 34% overall, with the water/wastewater sector showing the highest annual growth (11.1%).

Design-Build Earns High Satisfaction Rankings

• Experience with design-build was rated highest across all project delivery methods, with 77% reporting very good and excellent experiences.
• The ability to fast track, innovate and increase project collaboration/communication were identified as top benefits of design-build.

Additional Insights

• More than 60% of owners employ an owner advisor across each project phase.
• Respondents say design-build encourages greater Minority/Women/Disadvantaged Business Enterprise (MWDBE) participation.
• Interest in Progressive Design-Build (PDB) is growing, with the Pacific region (40%) showing the highest percentage of PDB procurements.

"This latest research confirms that as growing numbers of teams use design-build in all sectors, regions and project sizes, their successes are driving growth and innovation,” said Lisa Washington, CAE, DBIA Executive Director/CEO. “Design-build is changing the way America builds. More than ever, as our nation considers the passage of historic infrastructure investment, it's clear design-build will play a significant role in delivering the nation's most time and cost-efficient projects to our communities.”