Despite the estimated $136 billion boost the stimulus package is expected to deliver for construction work, overall construction activity will continue to drop from 2008 levels. According to Robert Murray, McGraw Hill’s Vice President of Economic Affairs, construction starts will be down 11% in 2009. Without the stimulus, the drop would be at least 15%.

There are a few signs of life, as highways and bridges are expected to be up 15% ($60 billion vs. $52.2 billion in 2008), environmental will rise 8% ($41.1 billion vs. $38 billion in 2008), and mass transit will increase 25% ($4.6 billion vs. $3.7 billion in 2008). But in virtually all other major sectors, the dreadful beat will go on as follows:

• Stores and shopping centers: Square footage down 28% (148msf vs. 207msf in 2008)
  

• Hotels: Square footage down 31% (56msf vs. 81msf in 2008)
  

• Offices:  Square footage down 27% (120msf vs. 164msf in 2008)
  

• Educational buildings: Square footage down 12% (195msf vs. 222msf in 2008)
  

• Healthcare: Square footage down 13% (96msf vs. 110msf in 2008)
  

• Manufacturing buildings: Square footage down 10% (65msf vs. 72msf in 2008)
  

• Single family housing: Units down 19% (445,000 units vs. 549,000 units in 2008)
  

• Multi-family housing: Units down 22% (238,000 units vs. 305,000 units in 2008)
  

In addition, construction starts in electric utilities will be off 25%, public buildings will drop 4%, and amusement and recreation facilities will slide 7%.

Yet in the face of this adversity, some A/E leaders remain resilient and willing to adapt. “I’m an optimist,” says Ira Levy, Northeast Region Chief Executive, AECOM (Los Angeles, CA). “The economy will come back. And when it does, will you be on top?” Levy says being flexible with your vision will be critical for future success. “It’s not the same one you had in 2006 and 2007. Your clients’ pressures have changed. Be responsive, and mold to their changes. Have a vision for what is in front of you.” Levy suggests that while you are busy surviving today, make sure you are making the right moves so you don’t miss the upswing when it finally gets here. “Allies are for tomorrow. Align with your client, partner, and stakeholder interests. The government will be our client more than ever, and the owner of our projects more than ever. Are you prepared to deal with that stakeholder? You’d better have a vision and the strategies that can accomplish that. It requires ingenuity, practicality, insight, solutions, and fresh thinking. Are the resources you need now the same ones that you needed a year ago? This is the time to retool. You simply can’t be scared to do it. You may have to get rid of an entire group and get another one.”

Derish Wolf, Chairman of Berger Group Holdings, Inc. (Morristown, NJ) acknowledges the challenges and also sees the government’s changing role and influence in the future of the A/E industry. “We are in perilous times, and A/E sectors are soft and under siege,” he says. “The government will increasingly be the arbiter in picking the winners and losers. It changes the model we have worked with.”

George Leventis, President of Langan International and Sr. Principal of Langan Engineering & Environmental Services (Elmwood Park, NJ) isn’t bullish on the stimulus plan, but he does think this economic crisis may accelerate the use of public private partnerships. “If the stimulus ends up repaving America, it won’t help the A/E industry. On the other hand, perhaps the reduction of tax dollars due to the recession will force the beginning of the US catching up on public-private partnerships. The rest of the world is doing it much more than we are here. Most states don’t have enabling legislation for the privatization of infrastructure, so we’ve got some ground to make up. But if this can be accomplished, it will be very beneficial. It will help our industry, the banks— essentially the whole system.”

The economy will rebound. So while you are hunkering down to ride out the storm, think about how you are going to capture the upswing— and start developing the strategies to come out on top.

A/E Industry Customer Service Report Card Results Are In...Engineers Hold Edge Over Architects
- MARK GOODALE

In 12 out of 14 distinct categories related to customer service, project owners give engineering firms a higher percentage of “A” grades than architecture firms.

This is just one of the findings in Morrissey Goodale’s recently released 2009 A/E Industry Customer Service Report Card. Overall, grades for both architects and engineers are decent, but there are a number of areas where the A/E industry could make significant strides— and in several instances, the direct feedback collected from anonymous project owners reveals a significant level of frustration with the service they receive from A/E firms.

For example, when it comes to keeping on budget, neither architects nor engineers are spared— more than 40% of the grades given are “C”s and “D”s. “It’s seems like it’s nothing but extras with engineering firms,” says a project manager for a Midwest healthcare system. “It’s very disappointing. And that’s everyone we’ve used. I’m just not satisfied.” A project manager in capital projects at a large state university adds, “Architects get halfway through the design, and they come back and ask for more. I think a lot of times they low-ball it. They tend to underestimate the actual work required and then always ask for additional money.”

Quality of the work is another area that appears to need attention— nearly a third (31%) of the grades given were “C”s and “D”s. “Architects do a lot of cut and paste of drawings,” says an executive of a major East Coast pharmaceutical company. “Sometimes they forget to change details, and you can see it was from a previous project. A lot of times, we end up doing our own review. In those cases, you’re just buying the stamp from them.” A representative from a healthcare organization adds, “We’re always looking for better engineers and architects. We joke about it. We feel like they’re giving us ‘as builts.’ We have to figure out what they did wrong and send it back to them to fix.”

Not all the news is bad. Integrity is given high marks— 48% of the grades given were “A”s. “The strengths of our engineering consultants are conscientiousness and professionalism,” says a representative for a Southwest state Department of Transportation. “They want to do a good job. I don’t see too many people trying to get away with anything,” he adds.

Nevertheless, the fact remains that the majority of project owners interviewed do not believe they are receiving an “excellent” level of customer service. And that equates to a significant opportunity for A/E firms that want to stand apart from the rest of the industry by providing “Grade A” customer service— a particularly valuable differentiator in a down economy.

Morrissey Goodale’s 2009 A/E Industry Report Card is now available for purchase and dowload at: http://www.morrisseygoodale.com/publications/reportCard.asp