The AEC Industry Outlook, Trends and Commercial Forecast we published in the first quarter of 2022 revealed an industry that was poised to grow alongside the many technological advancements developed to overcome post-covid challenges like:
- Adapting to a hybrid workforce,
- Employee retention,
- Lack of resources,
- Meeting tight deadlines, and
- Winning New Business.
Q3, however, opened in a wholly different industry. Our AEC Industry Midyear Survey and Assessment shows that the majority of AEC firms not only missed their first and second quarter goals, but had to cancel or delay projects for economic reasons.
Using data taken from our latest survey, this article provides the context you need to understand the current state of the AEC industry and, if necessary, change course to ensure a successful Q4.
The State of the AEC Industry 2022: Midyear Commercial Outlook and Survey Results
The AEC Industry Outlook Survey we conducted at the start of the year revealed an industry that was optimistic, with 78% of responders stating that their firm was positioned for growth in 2022.
Unfortunately, that sentiment has largely changed, with the impact of workforce challenges and economic issues resulting in a disappointing Q2 for the majority of the 500 firms polled in our survey.
Survey results show that only 28% of AEC firms met their first and second quarter goals, while 27% of firms said clients have had to cancel projects due to economic concerns. The bad news continues, with nearly half of firms revealing significant challenges with employee retention (45%) and supply chain issues (49%).
As you might expect, the weight of these challenges has led to a staggering 66% of firms who have had to reduce budgets and tighten spend. Most concerning is the 20% of firms who report a decrease in RFP win rate over the previous year.
Financial Confidence High, Despite Staffing, Economic and Supply Chain Challenges
Despite a disappointing second quarter and the myriad of challenges facing AEC firms in 2022, our midyear survey results reveal an industry that is cautiously optimistic. Of the 500 firms surveyed, 57% say that they expect the U.S. economy to improve in the coming months, while 66% of firms said they feel confident that their firm will meet their goals by the end of the year.
Unfortunately, respondents to the CONFINDEX survey are more pessimistic given the state of the economy, the rate of inflation and concerns that the federal reserve will begin to tighten monetary policy, making financing projects and construction loans more expensive.
AEC Firms Thrive Despite Negative Economic Outlook
Combined with the results of ENR’s Construction Industry Confidence Index, our AEC midyear survey and assessment reveals a disconnect between financial leadership and the rest of the industry.
Though the economic outlook appears bleak, advancements in technology have injected firms a much needed boost of confidence. With the rapid rate of change and unpredictability experienced over the last five years, many AEC firms are now tapping into the power of technology to transform the way they do business.
Industry Looks To New Technologies To Overcome Challenges, Avoid Future Disruptions
According to Deltek’s 2021 Clarity Architecture and Engineering Report, 54% of firms are struggling to prioritize which new technologies are most applicable to their business and which will yield the greatest results.
Despite the challenges with implementation, our midyear AEC check-in survey found that 68% (339 of 500 respondents) said that they have implemented or plan to implement new technology by the end of 2022 to overcome key challenges.
Digital Asset Management (DAM) and Customer Relationship Management (CRM) Top of Mind
Though a range of new technologies are now available to help firms improve their staffing and hybrid workforce processes, digital asset management (DAM) and customer relationship management (CRM) solutions are top of mind across the industry.
These implementations should aid architecture, engineering and construction firms with time allocation and marketing, two factors that our survey revealed to be the largest pain point, with 40% of respondents saying that they spend 2-5 hours per week on marketing tasks.
AEC Industry Commercial Outlook: Where We Stand As of Q3, 2022
Despite the challenges, our midyear check-in survey and others show that AEC is poised to grow alongside technological advancements in the coming years. Empowered by innovative martech solutions like OpenAsset, AEC marketers are doing more with less, and they are doing it faster than ever.
Designed for firms in the built world, OpenAsset is the preferred project-based DAM solution for Architecture, Engineering, Construction and Real Estate firms across the world. Follow the link for more insights on the AEC industry or schedule a demo of OpenAsset with one of our solution experts. Don’t forget to follow OpenAsset on LinkedIn for exclusive offers and valuable insight for AEC and Real Estate firms.