Research and Markets: Architects in the US – Revenue projected to grow 4.1% annually to 2017

DUBLIN--(BUSINESS WIRE)--

Research and Markets (http://www.researchandmarkets.com/research/zr5mp4/architects_in_the) has announced the addition of the "Architects in the US" report to their offering.

Best laid plans: Growth in new building construction will pave the way for a recovery

Executive Summary

The Architects industry derives the bulk of its revenue from non-residential building design. Only a small share of revenue is derived from contracts in the housing construction market; however, many small, regionally based contractors rely on the residential real estate market. Revenue is generated from fee-based contracts from preplanning and design services for construction and building projects. In the five years to 2012, IBISWorld estimates that industry revenue will decrease 2.6% annually to $42.4 billion. Industry growth slowed during the recession due to a deteriorating construction market and a decline in the number of building projects being planned. Further, business bankruptcies and pre-recession overbuilding have caused an oversupply of commercial and industrial real estate. The residential real estate market has also contracted dramatically, with the number of housing starts plummeting during the last five years.

Revenue is expected to increase 4.0% in 2012 due to marginal improvements in downstream construction markets. Profit margins are expected to increase to 7.5% in 2012, which is up from 6.6% in 2011. However, profit remains below prerecession levels. To maintain margins, many large firms have taken cost-cutting measures, such as laying off workers and cutting wages.

About half of industry establishments are sole proprietors or partnerships that do not have any employees; however, these nonemployers generate just 6.4% of total revenue. Small players were particularly hurt by the downturn because of their reliance on the residential real estate market. Further, they have fewer variable costs to cut than their big-name counterparts. Many of these small operators left the industry during the recession, causing the number of firms to fall 0.9% annually to 99,731 in the five years to 2012. Over the next five years, the industry will benefit from improvement in downstream industries. The volume of residential and nonresidential construction projects will increase as access to credit becomes more readily available for clients. While revenue is projected to grow 4.1% annually to $51.8 billion in the five years to 2017, it will not surpass the industry's 2008 peak until 2015. Profit margins are also expected to rise during the next five years, as more projects are put into firms' pipelines.

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Research and Markets: Architects in the US - Revenue projected to grow 4.1% annually to 2017