PSMJ Survey Shows A/E Sector In Downward Slide, Stopping Point Unknown
"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 include:
- Operating profits as a percentage of net revenues fell from 13.16% in 2001 to 12.27%, down nearly 7% from last year.
- Gross revenues increased only 6% versus 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 much lower rate than their peak of 15% in 2000.
- This year's Survey shows an increase of 6%, a 50% drop from last year's results.
- The staff growth rate is 3.2%, well below the peak of5.6% in 2000 and 27% below last year's rate of growth.
- 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 above last year's low of 145.7%.
PSMJ Resources' 2002 A/E Financial Performance Survey, 22nd Edition, analyzes the financial performance of design firms with respect to income and balance sheet measures; marketing results and costs; and staff ratios of technical and management personnel. The Survey also contains details on computer systems costs, various performance measures useful to non- financial managers, and historical trends and patterns over the past decade.