Dive Brief:
-
The construction design industry is steadily growing, with operating profit margins for architectural and engineering firms climbing this year for the third consecutive year, according to PSMJ Resources’ "2015 A/E Financial Performance Benchmark Survey Report."
-
The median profit margin among firms in the study is 14.3% this year, a six-year high. At its peak in 2007, the industry’s profits rang up at 15.2%
-
Between 2008 and 2010, profits declined every year, bottoming out in 2010 at 9.5%. After a spike to 9.9% in 2011, margins dipped slightly the following year before starting their steady climb.
Dive Insight:
Still, 14.3% is not “an acceptable profit margin at all” for construction design firms, according to Frank A. Stasiowski, founder and CEO of PSMJ Resources. “There are plenty of A/E firms that can and do deliver margins far higher than this,” he said.
He encouraged design firms to “think differently — about project delivery, about marketing strategy, about value. Deliver a higher value and you can command higher fees, and yield higher profits.”