An Electrical Design Surge: EC&M's 2025 Top 40 Electrical Design Firms Special Report
Even as a cloud of uncertainty — rivaling the one spawned by the Covid pandemic — descended on the U.S. economy this spring, the nation’s leading electrical design firms are largely refusing to succumb to pessimism about prospects for 2025.
Answering EC&M’s annual survey on business conditions in March, many of the 40 firms whose reported 2024 revenues qualify them for a spot in the EC&M Top 40 Electrical Design Firms for 2025 expressed some level of business concern about what’s happening on the policy front in Washington, D.C. Yet most see a strong 2025 unfolding in which revenues and backlog continue to grow, hiring is still a priority, technology continues to exert a positive impact on their business, and demand for their services blossoms as infrastructure projects that incorporate ever more electrical backbone move ahead, though haltingly. Although uncertainty might hang in the air, design firms seem willing to see through it.
A banner year
That might be a natural response coming off a year like 2024, which 78% of respondents said delivered a strong business climate for their firms (Fig. 1). That inched up from last year, when 76% of respondents said the 2023 business climate was strong. The recent high on that measure was reached the year before, when 91% judged the 2022 business climate as strong.
“We’re working in some critical market sectors which have seen strong tailwinds and good prospects for the near-term future,” says Darin Anderson, chairman and CEO. “It’s the result of choosing the right markets and delivering to our clients.”
One focus, he says, is on producing innovative solutions on the design side that have long been delivered by product manufacturers. Team members have developed a patented electrical system design that reduces the amount of rigid conduit needed and labor to install it, potentially “saving millions in construction and long-term energy costs.” The company has also innovated in the area of backup power using alternative fuels, getting clients away from the heavy sunk cost for traditional diesel backup generators.
Data center, power markets shine
Banking on no letup
Opportunities like that are certain to continue into 2025, a year most design firms see as promising. In fact, more than three-quarters of respondents expect revenue increases, many forecasting 10% (Fig. 5) or higher. That’s 11 percentage points more optimism for the year in progress than last year’s respondents showed. And a higher percentage see backlog increasing (Fig. 6). But, similar to last year, almost half see only modest backlog growth (Fig. 7) no higher than 9%. Still, substantially more (21%) see a decrease; last year decrease predictions totaled 6%.
With solid footing in multiple elements of the surging data center market, the 2025 landscape for Faith Technologies Incorporated (No. 17), Menasha, Wis., looks good, says Rob Messina, executive vice president. Design of both electrical systems and products it manufactures for data center integration work it and customers perform is core to its business, which may prove impervious to economic headwinds that could kick up this year. Worries about the impact of heightened uncertainty and sticky high interest rates on construction spending are real, he says, but the company’s design niche might prove resilient.
Policy trickle down worries
Federal funding is important for some infrastructure projects CDM Smith (No. 24), Boston, works on, but it may not prove essential to viability, says Matt Goss, MEP practice leader. Cutbacks are a concern, and the pace of projects going to bid could slow, but state and private sector funding could endure.
Tariffs are another Washington, D.C. worry for firms. Almost 85% said tariffs on China, Mexico, and Canada would have some negative impact (Fig. 12) on their business in the form of materials price increases and shortages that could alter the math for many building projects. All expect them to increase prices (Fig. 13) but are equally split on the magnitude.
Carollo Engineers (No. 10), Walnut Creek, Calif., specializes in water/wastewater projects that have been surging recently. Instrumentation Engineer Ron Burdick sees a chance for higher tariffs to “hit hard on the construction side, which will affect our bottom line.”
Staffing concerns persist
Training for new challenges
New demands and opportunities are also driving Carollo Engineers to train staff in new subject matter, Burdick says. Its water-focused business is incorporating more green energy and renewables, for instance, so some knowledge in that area exists. But as more co-generation and solar project opportunities emerge, he adds, the company might look to build, partly through more focused training, a group to tackle that more intensely.
AI adds to tech toolbox
While AI emerges other design-related technology tools are gaining a firmer foothold. Reported augmented and virtual reality (AR/VR) usage grew appreciably. Around 60% said they’re now using both AR and VR (Fig. 21 and Fig. 22), up from 40% and 48%, respectively, last year.
About the Author
Tom Zind
Freelance Writer
Zind is a freelance writer based in Lee’s Summit, Mo. He can be reached at [email protected].