Firm Leaders Reinvest and Expand Businesses as Profitability Increases

U.S. architecture firms have experienced a near complete recovery from the Great Recession, which has allowed firm leaders to reinvest profits back into their businesses. These findings, along with an in depth look at topics such as firm billings, staffing, and international work, are covered in the “The Business of Architecture: 2016 Firm Survey Report”.  The report offers metrics that provide insights into how architecture firms are operating and is available for purchase here.

“More than at any point in recent memory, there has been rise in the amount of renovation projects that architects have led compared to new construction activity over the past decade plus,” said AIA chief economist, Kermit Baker, Hon. AIA, PhD.  “A lot this has to do with green building incentives towards renovations, improved construction methods and products that increase the longevity of buildings, and a slower growing population that reduces the need for new construction.”

Key highlights:

  • Net billings at architecture firms were $28.5 billion at the peak of the market in 2008 and had nearly recovered to $28.4 billion by 2015.
  • Percentage of firms reporting a financial loss declined sharply in recent years from more than 20 percent in 2011 to fewer than 10 percent by 2015.
  • Growing profitability has allowed firms to increase their marketing activities and expand into new geographical areas and building types to diversify their design portfolios.
  • Renovations made up a large portion of design work with 45 percent of building design billings coming from work on existing facilities, including 30 percent from additions to buildings, and the remaining from historic preservation projects.
  • Billings in the residential sector topped $7 billion, more than 30 percent over 2013 levels.
  • Modest gains in diversity of profession with women now comprising 31 percent of architecture staff (up from 28 percent in 2013) and minorities making up 21 percent of staff (up from 20 percent in 2013).
  • Use of Building Information Modeling (BIM) software has become standard at larger firms with 96 percent of firms with 50 or more employees report using it for billable work (compared to 72 percent of mid-sized firms and 28 percent of small firms).
  • Newer technologies including 3D printing and 4D/5D modeling are reported being used at only 11 percent and 8 percent of firms respectively.
  • Energy modeling currently has a low adoption rate with 13 percent of firms using it for billable work, although this share jumps to 59 percent for large firms.

“From a practice standpoint, digital modeling is firmly entrenched in the early phase of design work and expanding into subsequent phases, with the potential for more involvement for architects through the construction and facility management processes,” said AIA senior director of research, Michele Russo. “In the coming years we expect firms will be adding technological dimensions to their design work through more utilization of cloud computing, 3D printing and the use of virtual reality software. This should help further efficiencies, minimize waste and project delivery delays, and lead to increased bottom line outcomes for their clients.”

MCA Reports Top Drivers in the Construction Industry

The Metal Construction Association (MCA) has released a report identifying the top 11 drivers in the nonresidential construction industry. The report, based on data analysis, surveys, and interviews with industry leaders, was prepared by FMI, a management consulting and investment banking firm dedicated to engineering and construction, infrastructure, and the built environment. The top trends in the industry trends were identified as follows:

  • Talent Shortages and Management Succession Challenges
    At the height of the recession, 30 percent of the commercial construction industry lost their jobs causing a lack of skilled workers as business picks up. The need to recruit and retain employees is key to attract the next-generation of millennials to the construction business.
  • Use of New Technologies
    With more prefabrication and modularization, use of robotics and 3-D printing, construction is becoming more standardized and computerized. BIM models are playing a role in all aspects of the construction process.
  • Productivity Improvements Needed for Profitability
    While use of BIM, prefabrication, modularization and green construction are necessary in construction manufacturing, at the contractor level, technology and planning are paramount to being profitable.
  • Changes in Construction Delivery Systems
    A slow shift is being seen from the traditional design-bid-build or hard-bid approach to more collaborative or alternative delivery methods that were gaining popularity before the recession.
  • Owner Transition
    As baby boomer leaders are getting to retirement age, the industry is facing a change in ownership among 50 percent of construction firms.
  • International Debt Problems
    Although the U.S. has experienced a resurgent economy, European countries like Greece, Italy, Spain and Portugal are struggling. After years of growth, China is also experiencing a slowdown in its economy, threatening the savings and investments made in the last few years.
  • Forming Partnerships with Customers
    A more customer-centric orientation is returning. Manufacturers and suppliers must match their marketing and delivery methods to the needs of the contractor and become partners in the process.
  • Healthier Companies
    In order to survive the recession, companies had to get to positive cash flow (or at least neutral) in the new demand reality of the 2009-2011 period. This focus on efficiency created reduced cost structures.
  • Growth Through Acquisition
    The demand for attractive building product companies to purchase is high. Industry stakeholders are looking to realize overhead efficiencies and maximize nontraditional margin enhancements (risk management, technology, self-perform). Those companies realizing profitability in this way are positioned to prosper as the construction market improves.
  • Consolidation
    On the manufacturing distribution side, 2015 was a year of company consolidation. Market conditions led to unprecedented merger activity among large players. Today, a seller can receive what the company deems a fair price, while a buyer feels there is still enough business ahead to make a return on the investment.
  • Mergers and Acquisitions Activity Benefit Buyers & Sellers
    Pace and scale of activity are both up with both strategic and financial buyers. With demand high and the supply of attractive companies low, one would expect prices to increase, and they have.

These trends are expected to play a role in shaping the nonresidential construction industry in the coming years and are part of considerations as companies make their plans. The full report is available to MCA members at www.metalconstruction.org.

The Metal Construction Association (MCA) promotes and expands the use of metal in construction through marketing, research, technology and education. MCA members include metal roof and wall panel manufacturers. Trade associations serving the metal construction industry partnered with MCA in this study. The participants are The American Iron & Steel Institute (AISI), The Aluminum Association (AA), Metal Roofing Alliance, National Frame Builders Association (NFBA), and the National Coil Coaters Association (NCCA).

Pressure Sensitive Tape Council Opens Calls for Abstracts for TECH 40 Technical Seminar

Pressure Sensitive Tape Council (PSTC) opens Calls for Abstracts to its TECH 40 Technical Seminar, taking place during the 2017 Tape Summit from May 15-19, 2017 at Mandalay Bay Hotel, Las Vegas, NV. Submitting an abstract allows participants to share industry expertise and leadership, all while supporting the PSTC event. Chosen abstracts and subsequent final papers will be highlighted at TECH 40 in Las Vegas.

Topics include ideas on processes, materials, technology, test methods, applications, environmental issues and more – all related to advancing the science of pressure sensitive adhesive tapes in the building construction, alternative energy, packaging, transportation, medical/healthcare industries.

The abstract submission process has been upgraded with a more user-friendly interface. Those interested in participating can visit www.pstc.org/TECH40Papers to submit an abstract. The deadline for submissions is Aug. 29, and applicants will be notified if their work has been selected in late fall 2016. In the event that applicants should require deadline flexibility for submission, contact PSTC directly at info@pstc.org.

The Pressure Sensitive Tape Council is an organization of pressure sensitive tape companies, complying with manufacturing standards in an environmentally and socially responsible manner.

Mobile App Allows Access to Site- and Date-specific Hail Reporting Data

HailStrike's OneSite Mobile app allows users to access extensive, detailed and time-sensitive hail reporting data from the field, from virtually any mobile device.

HailStrike’s OneSite Mobile app allows users to access extensive, detailed and time-sensitive hail reporting data from the field, from virtually any mobile device.

HailStrike introduces OneSite Mobile, an innovative service poised to bring a solution to mobile access for hail storm dates.

HailStrike’s OneSite Mobile app allows users to access extensive, detailed and time-sensitive hail reporting data from the field, from virtually any mobile device. The app gives the flexibility of requesting hail data and potential dates of loss with the touch of a finger. The only input needed is a property address, which can be automatically attained using a powerful Geo-Locating algorithm, or by manually entering a property address. The powerful tool takes the address and reports all hail activity over the past five years, including size, duration, storm speed, storm direction and more.

The OneSite Mobile app can deliver two types of reports: a comprehensive, detailed OneSite report with historical activity along with support documentation, or a OneSite Lite that individually lists the dates of activity. Both of these reports are generated from the field in less than three minutes.

Insurance adjusters, CAT teams, independent claims adjusters, public adjusters, roofing contractors, and roofing engineers will find OneSite Mobile an indispensable tool in immediate remote hail verification for a specific address.

OneSite Reports utilize Dual Polarization, NEXRAD radars’ newest technology, which creates a digital, High Definition look into the heart of a storm. Only HailStrike captures, stores and analyzes this data every five minutes from NOAA’s NEXRAD (Next-Generation Radar) station across the country and then processes it with HailStrike’s patent-pending algorithms.

Pentair Launches Heat-tracing Content Add-in for BIM Software

A provider of industrial heat-tracing systems, Pentair’s Thermal Building Solutions, has launched a software add-in for the Autodesk Revit platform. Trace-It 1.1 is a comprehensive suite of new tools, available for free download that allows users to easily incorporate heat-tracing content into their BIM (Building Information Modeling) models. This optimizes efficiencies and performance, saving time for designers and lowering costs for building owners.

Raychem Trace-It 1.1 allows for graphical placement of controls and connectors for visual space planning to help select the optimal Raychem product for the application. The new tools offers a more accurate bill of materials for a wider and more complex range of pipe networks than the original version, further simplifying project planning and installations to significantly reduce raw materials. In an effort to best tailor the software to each user, the upgrade version also allows customers to open customized specifications, create a Revit schedule or place critical Revit families into their project.

Last year, Pentair introduced BIM content for heat-tracing solutions, including BIM families and the dynamic Raychem Trace-It Revit add-in for winter safety applications and hot-water maintenance. In addition to the add-in, Pentair developed a group of families for ramp heating and surface snow melting, and roof and gutter de-icing. Each family includes design guides and product information to assist with the design of the heat-tracing system.

“As a pioneer in the global heat-tracing industry, we believe it’s important to assist our customer base with platforms that can bring ideas from concept to construction, comments Steve Peck, marketing manager for Pentair’s Thermal Building Solutions division. We continuously try to develop the tools and products our customers need to make their projects run up as smoothly as possible. Our new Trace-It upgrade offers a range of additional functions that do just that.”

App Increases Ability to Apply Metal Panel Systems

Fabral, a supplier of metal roofing and wall panels, has launched a mobile app to meet the demands of architects and contractors on the go.

Fabral, a supplier of metal roofing and wall panels, has launched a mobile app to meet the demands of architects and contractors on the go.

Fabral, a supplier of metal roofing and wall panels, has launched a mobile app to meet the demands of architects and contractors on the go. Inspiring project images, product information, metal panel and CSI specs, color charts, and more are now available for mobile access through Apple and Android devices. This enhancement increases customer ability to visualize, demonstrate, specify and apply Fabral metal panel systems. The app can be downloaded at no charge through the appropriate Play Store. Positively received at MetalCon 2015, Fabral customers can also save a thumbnail on their own websites to make the app more widely available.

App Allows Access to Photos, Videos and Detailed Technical Information

Samco Machinery developed a free smartphone application allowing access to company pictures, videos as well as detailed technical information.

Samco Machinery developed a free smartphone application allowing access to company pictures, videos as well as detailed technical information.

Customers are searching for information in new ways and Samco Machinery is doing even more to put that information right at their fingertips.

Earlier this year, Samco Machinery developed a free smartphone application allowing access to company pictures, videos as well as detailed technical information. That application is now available to Android users. Once the Samco App is downloaded, it can be accessed at any time, without the need for online access.

The Samco Machinery App, available for free in the Apple Store and now in the Google Play Store, contains five sections to provide any data the potential customer may need.

  • About Samco Machinery: contains company information, a product gallery and the corporate video.
  • Markets: contains spec sheets and machine videos relating to the various industries served by Samco.
  • RFQ: allows customers to submit a request for information.
  • Support: features a link to the company website as well as the names, titles and email addresses of support staff.
  • News: hosts the latest company news, media coverage, as well as providing up to date trade show information.

The National Storm Damage Center Develops Website for Impending Weather

The National Storm Damage Center has developed a portal that offers forensic, geo-targeted technology.

The National Storm Damage Center has developed a portal that offers forensic, geo-targeted technology.

The National Storm Damage Center has developed a portal that offers forensic, geo-targeted technology that can detect every critical characteristic of an impending tornado, hurricane and storm, including the precise addresses that will be most affected. The portal pairs homeowners with prescreened certified roofing and building contractors, along with the nation’s leading public insurance adjusters who work on behalf of the policy owner, not an insurance carrier. Learn more about becoming a certified contractor at StormDamageCenter.org.

Touch-enabled Tool Makes Lean Planning and Execution Easily Accessible

MOCA's Touchplan.

MOCA’s Touchplan.

MOCA launches Touchplan, a real-time collaborative planning web application for lean planning designed for modern workflows used by high-performance project teams.

MOCA has taken the ‘sticky’, added some computer genius and created a simple yet powerful touch-enabled tool designed to make lean planning and execution easy and accessible to everyone.

With Touchplan, team members collectively establish an overall work plan with virtual stickies and, as work advances, use the same environment to sharpen their plan for upcoming weeks. The effects of these refinements translate immediately to the entire plan, and what-if scenarios can readily be evaluated to address any concerns that arise. Visit Touchplan.io for further information.

NRCA Partners with The Review Solution to Collect Customer Reviews

The National Roofing Contractors Association (NRCA) has announced its partnership with Franklin, Tenn.-based The Review Solution in order to provide members with the added benefit of collecting customer reviews at the point of service. These customer reviews can be posted to leading review websites such as Google+, Yelp, Houzz, Home Advisor, BBB and Angie’s List.

The platform centers on an app that works on all iOS and Android mobile phones and tablets. The service requires no long-term contract.

Features of The Review Solution include mobile and job-site readiness, reviews collected by email from past satisfied customers, and the ability to facilitate the posting of reviews to major online review sites. Additionally, multiple users from multiple locations can use the app, and business owners can receive real-time text and email notifications for all submitted reviews. Positive reviews for the members’ businesses can be automatically syndicated to their Facebook and Twitter pages.

NRCA’s affinity program offerings are a benefit of membership that offers products and services from affinity program partners at significant member discounts.