Design Firms Down, According To Survey
NEWTON, MA — PSMJ Resources Inc., a management information firm serving the architecture/engineering/ construction (A/E/C) industry, has announced the findings from its 2002 A/E Financial Performance Survey, which indicate that the design sector is in a downward slide. Operating profits as a percentage of net revenues dropped from 13.16% in 2001 to 12.27% this year, a decrease of nearly 7%.
Gross revenues increased 6% compared to 12% in 2001, a 50% drop.
Direct labor per hour rose 5% to $23.95, indicating increased pressure to raise salaries as firms try to retain staff.
Backlogs continue to rise, but at a substantially lower rate. This year’s increase was 6%, a 50% decline from a year ago.
Staff growth rate is 3.2%, which is well below the peak of 5.6% in 2000 and 27% below last year’s rate.
Utilization (chargeability) is 61.7%, down from a peak of 62.5% in 2000 and slightly better than last year.
Overhead rates increased to 150.8%, a significant increase over 2001’s low of 145.7%.
“Design firms saw many performance indicators peak two years ago, and most have fallen below their maximum levels,” reported survey editor and consultant, Harold E. Daniels Jr.
“The construction industry continues to drive the engineering and design sectors; A/E firms are feeling the impact of instability in this area.”
Key findings of the survey include:
Publication date: 08/05/2002
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