$2.15 Billion and Counting

Which markets helped fuel this solid growth last year? As was the case in prior years, the health care, education/institution, and power (utilities/T&D) sectors remained hot. Some of the firms also found success in the transportation sector, which includes aviation and rail projects. But this type of growth doesn’t come without challenges. More than three-fourths of the firms indicated they were experiencing labor shortages. Experienced project engineers and project managers were identified as the most difficult positions to fill, followed closely by supervising engineers. This lack of talent limits their ability to bid on new jobs and expand into new markets. It also drives up their labor costs. Can you imagine what the overall design revenue total would have been if all of these firms had access to the senior-level talent they’re ready to put to work right now?

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.