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Health Care and Schools Hot Markets for Design and Construction Firms in 2005

Health care, K-12 and higher education will be among the hottest markets for design and construction firms in 2005, according to ZweigWhite’s "2005 AEC Industry Outlook: Strategy and Insight for Design & Construction Firms." The Architecture Engineering Construction business has outperformed the U.S. economy as a whole in recent years, including 2004, and the design and construction industry expects to see more of the same this year.

In a survey conducted in conjunction with the ZweigWhite report, 40% of respondents expect the AEC business to outperform the U.S. economy this year, while only 20% expect it to lag behind.

Respondents reported that 2004 produced strong results for their firms, and predict their businesses will be even better in 2005. Fifty-seven percent expect their businesses to be "outstanding" or "excellent" in 2005; 47% reported those levels of business performance last year.

The survey also asked respondents to rank prospects for 25 markets this year, and health care, K-12 schools and higher education came out on top.

• Health Care. In addition to the design and construction leaders who ranked the health care market first, the U.S. Department of Commerce projects that health care construction put in place will grow 7.9% in 2005, the fastest of any market sector. The needs are high, and the money is there. Double-digit increases in health insurance costs are providing capital, and an aging population and advancements in technology are increasing demand.
•  K-12. Demographics, voter-approved bond measures, strong property tax revenue and court-mandated programs will move the K-12 market to the head of the class in 2005. Many school systems in the South and West need to expand to accommodate growing populations, while changes in school-finance formulas in some states have led to court-ordered school construction programs in poorer, urban districts.
• Higher Education. Higher education construction is at an all-time high. With the "baby boom echo" on its way, colleges and universities will need to upgrade and expand residence halls and educational facilities to deal with the population surge. Improvements to state budgets and a rebounding stock market will help financing.

For more information on the report, click here.

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