Four in ten firm leaders report seeing an increase in delayed projects at their firm
Architecture firms reported ongoing softness in business conditions to close out 2022, as firm billings declined for the third consecutive month in December. However, the ABI score of 47.5 significantly delayed projects at their firm has been increasing over the last six months, while 30% reported that the share of indefinitely stalled projects has been increasing, and 21% indicated that the share of canceled projects has been increasing.
Overall, firms reported that an average of 13% of the projects at their firm over the past six months have been significantly delayed, 6% have been indefinitely stalled, and 3% have been canceled. Firms with a multifamily residential specialization have been most significantly impacted, as they reported that an average of 18% of their projects have been significantly delayed, in contrast to 15% of projects at firms with a commercial/industrial specialization and 9% of projects at firms with an institutional specialization. Firms located in the Northeast and West regions also reported a higher share of significantly delayed projects than firms in other regions.
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Architecture firms anticipate relatively slow adoption rates for new and emerging technologies in design and construction
By Kermit Baker, Hon. AIA, AIA Chief Economist
U.S. architecture firms reported another solid month of growth in October 2015. The AIA’s Architecture Billings Index (ABI) was 53.1 for the month, demonstrating a solid increase in firm billings that was just below the 53.7 score for September. New project inquiries, with a score of 58.5 for the month, and new design contracts at 51.7, point to healthy business conditions at architecture firms. However, both readings fell a bit from their September level, suggesting that growth may moderate just a bit in the coming months.
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The overall strong performance in business activity in recent months is beginning to show a regional pattern. Firms in the South have been reporting continued strong business conditions through the year, while firms in the West have been reporting acceleration in billings over the past few months. In contrast, Northeast firms have been reporting weak conditions in recent months, and Midwest firms—while reporting growth—have seen billings increase at a somewhat slower pace.
Firms in all the major construction sectors reported healthy conditions in October, with the strongest growth coming from commercial/industrial firms. Residential firms recorded their second straight monthly increase after seven straight monthly declines. Institutional firms saw growth on par with September, but their ABI scores have been declining for the past several months, indicating that the pace of growth of billings at these firms has been moderating.
In Spite of International Concerns, U.S. Economy Doing Well
The economy sputtered a bit in the third quarter, producing only 1.5% growth at an annualized basis. However, there appears to be some firming in economic conditions to date in the fourth quarter. There was a net increase of 271,000 payroll positions nationally in October, well above expectations, and the strongest monthly increase so far this year. That pushed the national unemployment rate down to 5.0%, its lowest level since early 2008. The construction sector has been an important contributor to the employment front, adding 31,000 payroll positions for October and 159,000 through the first ten months of the year. Construction has thus accounted for almost 8% of payroll gains so far in 2015.
An improving labor market, coupled with continued low gasoline prices, has improved the consumer’s outlook. The preliminary consumer sentiment index from the University of Michigan jumped up in November to its highest level in several months. This has produced higher levels of consumer spending, as retail sales—after netting the lower amounts spent on gasoline—saw healthy gains in October. A key test of the perceived health of the economy will come in mid-December when the Federal Reserve Board decides whether an increase in short-term interest rates is warranted to prevent potential future overheating.
Innovative Technologies May Not Yet Be Ready For Prime Time
In the design professions, as in other sectors in our economy, change is inevitable, but the pace of change may be slower than commonly thought. In an effort to see how the profession might be evolving over the coming five to ten years, this month’s question to the AIA’s Work-on-the Boards panel looked at design and construction elements that might be increasing in importance over this time period.
Topics covered included the areas of design and construction process and techniques, building characteristics, building features and systems, and construction materials. Several of the areas deemed to be becoming more widespread over this period are already fairly widely utilized, such as lighting technology systems (LED, day lighting/natural light), water conservation/efficiency, and energy efficiency designs and retrofits. The overwhelming majority of respondents felt that these design elements would be increasing in importance over the coming five to ten years.
However, other recent innovations that typically have garnered more attention may not reach the same levels of adoption over this period according to architecture firms. One example is the use of robotics in the construction process. Only one in nine respondents feels that this technology will significantly increase in importance over the next five to ten years. Conversely, about four in ten respondents feel that there were be no significant increase in this technology over the coming years. The results were not much different for 3D printing used in the construction process. Only about one in six respondents feels that this technology will significantly increase in importance in the coming years.
This month, Work-on-the-Boards participants are saying:
• After a late summer lull, clients seem to be back at their desks, making decisions and issuing RFPs and RFQs. Prospects for 2016 are looking up.
—33-person firm in the West, mixed specialization
• Firms are very busy and fees are slowly catching up with personnel salary increases.
—6-person firm in the South, institutional specialization
• Northeast (other than NYC) is still struggling to come out of the recession.
—4-person firm in the Northeast, mixed specialization
• New problem for us, long-predicted: talent shortage. Could increase staff by 15-20% if people were available. I expect this to last a long time.
—20-person firm in the Midwest, commercial/industrial specialization
The ABI Work-on-the-Boards Survey Panel is open to any AIA member who is principal/partner of their firm. Apply to join the ABI panel by completing a brief background information form on your firm here.
Consulting For Architects, Inc. (CFA), a leading staffing firm for the architecture and interior design industry since 1984, announced today the hiring of Recruiter Kristi Enigl located in the New York office.
Consulting for Architects (CFA) is pleased to welcome its newest member, Recruiter Ms. Kristi Enigl. CFA has been recruiting talented architects and interior designers since 1984 and placing them in long-term roles with top architectural and design companies throughout the United States. Their latest team member, Ms. Enigl, holds a Bachelor of Arts in Telecommunications from San Diego State University, and for the past two decades has served as senior recruiter and account manager, HR manager and career consultant for staffing firms and architectural companies alike.
What happens when you tell someone you’re a freelancer?
In my experience, you’ll probably get some version of the following:
1. “I wish I could work in pajamas and sleep in every day!”
There may be some freelancers who don’t have to leave their house, spend their days watching Mad Men reruns, and only work 4 hours a day — but honestly, I haven’t met one yet.
Most freelancers are too busy going to client meetings, meeting with prospective clients, working out of the client’s office, going to networking events, working around their families’ schedules, and, you know, running their own business.
The idea that freelancers are sloppy and carefree somehow implies that freelancers just don’t work as hard as 9-5-ers. Not true!
2. “Ugh, the economy is so tough.” (I.e., freelancing is not a real job or people are only freelancers because they can’t find a real job.)
While it’s true that many traditional workers didn’t start freelancing by choice, it doesn’t mean that freelancers are poor, miserable souls who can’t wait to crawl back to corporateville.
Many freelancers either go independent by choice or find they like freelancing better, whether it’s because of more autonomy or better work/life balance or a host of other reasons that don’t involve desperation and agony.
It’s true that freelancing still doesn’t have the status of a C-level position in most fields. I expect that as more workers go freelance, a more realistic perception will develop: there are bad freelancers and good freelancers, happy freelancers and miserable freelancers, experienced and inexperienced.
We’ll soon see workers as whole people with a set of skills and services, not as the position they’re in.
3. “It must be so nice to never have anyone order you around!”
Wouldn’t it be great if this were true?
It’s true that freelancers are their own bosses — but sometimes, to maintain a good client-freelancer relationship, you have to let the client have what they want.
The best clients do say: “Here is the task I want, here are my expectations, I trust you to complete it well.” There are also clients who micromanage you the whole way. And a whole host of other people who think “freelancing” means “lowest rung on the totem pole that I can treat any way I want.” This is where freelancers have to educate clients about proper relationships and expectations.
4. “You must always have such exciting work!”
One of the best things about freelancing is that, to a certain extent, you get to choose the projects you’ll work on. If you work in a creative field, you’ll also be able to develop your own unique style/niche/speciality, so that people who come to you want YOU, and let you be your whole self.
But there are going to be boring days. There are going to boring projects or boring revisions or boring accounting.
Also, some freelancers are happier doing work they’re good at for steady clients than having constant new/exciting projects. They love the time they have with their family and they love the flexibility more than they love every single project they work on.
5. “Freelancers pad their invoices — you can always get them to negotiate down their fees.”
You probably won’t hear anybody say this to your face, but they will say it behind your back!
First, many freelancers are actually undercharging for their services. That’s because many people who go into freelancing assume that they should charge the hourly rate they got when they were an employee.
No. You need to charge that hourly rate, plus what you used to get for benefits that you now have to pay for yourself (~20-30%), plus an estimate of how much time it takes to land the client and ancillary things (like invoice filling), plus any equipment costs (like computers). This is an accurate representation of your value, not padding.
Freelancers who undercut the market rate hurt all freelancers and set expectations for cheap work.
6. “I could never freelance — I have too many financial obligations. It’s so insecure!”
The truth is that every job is insecure. Markets change, companies close or downsize.
The only security you have is the ability to provide a service of value that someone is willing to pay for. Your security is you. This isn’t a mindset, it’s a set of actions — all of which are easier said than done.
Smart freelancers make themselves recession-proof by having multiple income streams, constantly marketing themselves and forming new connections, and staying flexible by learning new skills, new programs, new fields.
When the economy leaves a smart freelancer in the lurch, he/she can pivot skills or rely on another income stream. Traditional employment can give one the illusion of stability, and that in itself is pretty risky!
What other myths about freelancing have you heard?
Lingering impact from the Great Recession slows gains in salaries
Over the last several years, most architecture firms have benefited from a general improvement in the economy as well as in the construction sector. Revenue at architecture firms increased almost 11 percent in 2012 from 2011 levels, according to U.S. Census Bureau figures, and firm payrolls have followed suit. But this modest improvement in business conditions has done little to lift compensation levels at firms. Between 2011 and 2013, average total compensation for architecture positions—including base salary, overtime, bonuses, and incentive compensation—increased only slightly over 1 percent per year, barely more than the average increase in compensation between 2008 and 2011, when the construction sector was still in steep decline.
Even this modest 1 percent increase in average architect compensation may overstate the experience of the typical architect during this period. Average compensation depends on the mix, by experience levels, of positions reporting. Since many less experienced architecture positions were eliminated during the downturn, current average compensation may reflect a higher share of more experienced (and more highly compensated) positions. Regardless, while average compensation for architecture positions increased a mere 0.7 percent per year compounded between 2008 and 2011, growth increased to only 1.1 percent per year between 2011 and 2013 (Exhibit 1.1).
Architecture staff compensation tends to be more volatile over the business cycle than compensation for most other occupations. Over the past decade, compensation gains for architecture positions have more than kept pace with compensation across the entire economy. Architecture compensation increased 35 percent between early 2002 and early 2013, compared to just under 32 percent for all professional and related staff (typically defined as white-collar workers such as lawyers, accountants, etc.), and just over 29 percent for all private-sector workers (Exhibit 1.2).
Compensation levels vary by firm size
Historically, large architecture firms have offered higher levels of compensation. These comparisons are more difficult for more senior positions because job responsibilities are difficult to compare across firms of different sizes. However, this disparity exists even for positions with relatively standard job descriptions such as Intern 1 or Architect 1.
At firms with fewer than 10 employees, Intern 1 compensation averaged 10 to 15 percent below national averages. At firms with more than 250 employees, Intern 1 compensation averaged more than 10 percent above the national average. A similar pattern held for Architect 1 positions: about 10 percent below the national average at firms with fewer than 10 employees, and almost 10 percent above the national average at firms with 250 or more employees.
Staff turnover and fringe benefits reflect improvement
Another sign that business conditions have stabilized across the profession is that benefits offered to employees have begun to modestly improve at many firms. While declining between 2008 and 2011 as firm revenues eroded, they rebounded modestly by 2013, with benefits packages averaging 18 percent of base salaries for professional staff. Benefits have bounced back faster at larger firms and remain significantly higher than those offered by smaller firms (Exhibit 1.3).
The entire CFA team and I are pleased to announce the completion of the rebranding of our company, social sites, and website. We wanted a fresh new look that better reflects our times and services in a constantly changing world and the professionals we represent. I described CFA to as a 29 year old “start-up” because we have always reacted well to change and our brand should reflect our unique ability and staying power. CFA was successful the year it was created, 1984, and has never looked back.
Special thanks and acknowledgement goes out to our designer Ryan Kovich. Ryan devoted several months of his valuable time and energy studying the creative world of architecture and design and contemplating our brand identity. He took that knowledge and his creative energy to bring us this great new brand. Find Ryan Here.
We would also like to thank our creative editor David Gibbons. David did a tremendous job taking our ideas, filtering out the rhetoric, and providing rock solid content that expresses our brand perfectly. Find David Here.
Finally, we would like to thank our consultants and clients who gave us their valuable input throughout this process. Our rebranding efforts success would not be possible without them.
Would you like to evaluate our new Website? Evaluation Form.
When it comes to sourcing the right interview candidates, I’ve never been keen to use recruiters. But I recently changed my mind.
My company, Metal Mafia, has an excellent candidate screening process, a super training program, and a very successful team of employees to show for it.
But hiring has always been a difficult task for me because each time I get ready to hire, it takes me forever to find the right type of candidates to even get the screening process started.
Despite the fact that I carefully consider where to advertise for candidates–I try to maximize the search dollars and get a good mix of potential applicants–it always takes me a long time to find people suited well to the company, and therefore, even worth interviewing.
I’ve tried everything from placing ads on large job boards like Monster.com, to smaller specialized job boards that cater to sales hires or fashion jobs, to local university boards where I can post for free (or close to it). Each time, I experience the same slow crawl toward finally finding the right person. It has taken me up to five months to find the right kind of hire in the past. So in November when I decided I needed to think about hiring for the new year, I was not optimistic.
For me, recruiters have traditionally been out of the question because I figured they would be a waste of time and never be as good at sending me the right people for the job as I would be in reviewing resumes myself. They’re also too expensive for my small budget. But as I got ready to place my job ads again, one of my senior staff members came to me and offered me the name of a fashion recruiter she knew and thought could help. I was skeptical, but I called her anyway, figuring listening would cost me nothing.
The recruiter convinced me she would do a thorough job, but I still hesitated because of the price. I do not have large sums of money to devote to the hiring process, and by my calculations, when all was said and done, using the recruiter was going to cost me three times as much as my usual techniques. On the other hand, the recruiter would only charge me if she found someone I decided to hire, which meant I was risking nothing, and could always come back to my original methods. I bit the bullet and signed up, reminding myself “nothing ventured, nothing gained.”
The recruiter sent me the resumes of 10 entry-level candidates. I screened six by phone, met three in person, and found the right hire–all in a month. The cost suddenly became much less, because I saved so much time in the process, and because I got a pool of applicants who were decidedly better to choose from than in the past. Even more interesting, perhaps, was an insight the right candidate shared with me during the interview process. When I asked why she had chosen to work with a recruiter rather than post on job boards, she said “because recruiters make sure your resume gets seen, while submitting via the Internet is like sending your resume into oblivion.”
If most people these days are thinking like my new hire, the recruiters will clearly have the best selection of candidates every time. Looks like I’ve got an essential new hiring strategy.
Vanessa Merit Nornberg: In 2004, Vanessa opened Metal Mafia, a wholesale body and costume jewelry company that sells to more than 5,000 specialty shops and retail chains in 23 countries. Metal Mafia was an Inc. 500 company in 2009. @vanessanornberg
World-Famous Architects, Richard Meier and Stanley Tigerman, Deliver Keynote Addresses – Four New Jersey Tri-State Design Award Winners Announced –
“Traditionalism versus modernity.” That was the theme at the first-ever American Institute of Architects (AIA) Tri State Conference, which was recently hosted by the AIA-New Jersey chapter, in conjunction with the AIA New York State and AIA Pennsylvania chapters, in Atlantic City, N.J.
With more than 300 attendees, including world-famous architects Richard Meier and Stanley Tigerman, who were the keynote speakers, the conference united members of the architectural profession and explored topics ranging from energy efficiency to public infrastructure to Leadership in Energy and Environmental Design (LEED) designations.
“This conference was the product of many years of collaboration between the state chapters,” said Michael Hanrahan, president of AIA-NJ. “The first-class caliber of our keynote speakers reflects the quality of the conference.”
The conference offered a great opportunity for architects of all levels of experience to learn collectively about the important trends and updates in architecture today, said Hanrahan.
Keynote speakers Meier and Tigerman offered anecdotal information from their respective practices – Meier, with more of a modernist approach; and Tigerman, with more of a traditionalist approach.
Meier, who was born in Newark, N.J., talked about a handful of his projects, while showcasing them through a slide show.
“Architecture is the mother of the arts,” Meier said. “I like to believe that architecture connects the present with the past and the tangible with the intangible. I believe that architecture has the power inspire, to elevate the spirit to feed both the mind and the body. For me, it’s the most public of the arts.”
Meier went on to explain his infamous stark white building designs.
“White is the most wonderful color because within it you can see all the colors of the rainbow,” he said. “The whiteness of white is never just white; it is almost always transformed by light and that which is changing — the sky, the clouds, the sun and moon.”
Stanley Tigerman
Tigerman’s also showed examples of his work and historical precedents. His remarks focused around his lifelong search for meaning in his work, and spoke of the plans for his buildings — not the walls, but the void contained within.
“In many cases these spaces became sacred, like the sacred space of a monastic cloister,” he said. “In form and elevation, the fabric of buildings appears to be torn apart, revealing the space within.”
It was an acceptance of transience, or “Wabi Sabi,” as he put it, that compelled him; a search for the ineffable.
“Nothing lasts,” said Tigerman. “Nothing is perfect. Nothing lasts forever. I don’t know the answers, I am seeking that too.”
And, when questioned as to how one could put these thoughts into practical terms on other projects, Tigerman replied, “First you have to believe in what you are doing before you have any hope of being able to convince others.”
The conference also featured the Tri-States Design Awards, for which each state chapter selected state winners that were submitted for the tri-state design competition. There were 24 winners in the categories of Special Initiatives, Residential Architecture, Non-Residential Architecture, Regional and Urban Design, Interior Architecture, Historic Preservation and Unbuilt.
“The conference attracted the best from all over the region, and through the design awards the best work from the past year was showcased for all to see,” Hanrahan said.
The New Jersey design winners included Minervini Vandermark Architecture of Hoboken, N.J., who won a merit award in the Residential category for its 33 Willow Terrace project in Hoboken, N.J.; Payette Architect of Boston, Mass., in collaboration with the design architecture firm Hopkins Architects of London, England, who won an honor award in the Non-Residential category for its Frick Chemistry Lab project in Princeton, N.J.; Kohn Pederson Fox Associates of New York, N.Y., who won a merit award in the Non-Residential category for its Centra at Metropark project in Iselin, N.J.; and Wallace Roberts & Todd LLC of Philadelphia, who won a merit award for its Roosevelt Plaza project in Camden, N.J.
The conference offered event-goers a choice of over 25 courses, all of which counted toward continuing education credits. Attendees were able to obtain 12 of these credits during the conference. The subject matter of the courses fell within the theme of the conference, and the courses catered to all levels of the profession.
About AIA and AIA New Jersey The American Institute of Architects (AIA) is the professional organization that helps architects serve the public’s needs and builds awareness of the role of architects and architecture in American society. The organization, which was founded in 1857, recently celebrated its 150th anniversary. Headquartered in Washington, D.C., its 300 plus local chapters represent 86,000 licensed architects and associated professionals. AIA New Jersey, based in Trenton, is the local chapter of AIA. In 2000, it celebrated its 100th anniversary. AIA New Jersey has about 2,000 members in six regional sections. For more information, please visit www.aia-nj.org.
Signs of recovery – but some practices just hanging on
Work for architects in the US stayed close to break-even level during the first quarter of this year.
The American Institute of Architects reported that the score for its Architecture Billings Index was 50.5 for March – down slightly on the 50.6 recorded the previous month. Any mark above 50 reflects an increase in billings. The new projects inquiry index was 58.7, up from February’s figure of 56.4.
AIA chief economist Kermit Baker said: “Currently, architecture firms are essentially caught swimming upstream in a situation where demand is not falling back into negative territory but also not exhibiting the same pace of increases seen at the end of 2010.
“The range of conditions reported continues to span a very wide spectrum with some firms reporting an improving business environment and even ramping up staffing, while others continue to operate in survival mode. The catalyst for a more robust recovery is likely financing.”
