EC&M’s Top 40 Electrical Design Firms have been cranking out the projects the last few years — that’s for sure. Overall design revenue has grown from $1.68 billion in 2014 to $1.86 billion in 2015 to nearly $2.15 billion in 2016. That’s a pretty impressive three-year growth rate. I guess that’s why more than half of these power players characterized last year’s business climate as “strong” and a whopping 85% met or exceeded their revenue projections.
What does the financial future look like for our Top 40 Electric Design Firms? For the most part, this bunch is bullish in the short term. Sixteen firms forecast their revenue to hold steady this year or rise by up to 5%. Another nine firms project a revenue increase between 6% to 10%, and seven additional firms project their revenue total to rise by more than 10%.
Where will the demand for their services come from in the near future? Since half of the Top 40 Firms identify the general building category as their primary area of expertise, it makes sense that this group sees building management / building automation systems work as the most promising revenue driver in the next year or two. The growing complexities of upgrading older disparate building systems into networked intelligent buildings will certainly drive the demand for engineering services. A majority of the other half of the Top 40 firms identify one of these three market sectors as their primary business: power, water supply/wastewater, and transportation. So it makes sense when we asked them which market sectors would benefit the most from a Trump Administration Infrastructure Investment Plan they replied in order of importance: water supply and wastewater systems; electric utility grid; highways, streets, roads and bridges; airports; and railway systems. In fact, 77% of the Top 40 firms believe a $1 trillion plan would have a moderate or significant positive impact on their business.
At the moment, the future looks really good for our Top 40 firms. Let’s hope they continue the trend of year-over-year revenue growth for many years to come.