Last year at this time, after analyzing the annual Top 40 Electrical Design Firms survey results that we present every June, I was contemplating whether the U.S. economy was headed for an inevitable recession, given the ramifications of the coronavirus pandemic. Economists had presented a mixed bag of predictions that were pretty much all over the place, which reminded me of how differently people often see the world (with more of an optimistic or pessimistic slant). What a difference a year makes, and what a year 2020 turned out to be — so unprecedented, in fact, that it doesn’t even seem fitting to use the glass half full or glass half empty expression. That said, this year’s group of survey respondents, despite some obvious setbacks resulting from the ravages of the pandemic, did collectively demonstrate more optimism than pessimism for the future in their answers.
Although the number of electrical design firms characterizing the 2020 business climate as “strong” took a nosedive this year, plummeting from 74% in 2020 (based on 2019 numbers) to 30% in 2021 (based on 2020 numbers), 35% of firms indicated that they “exceeded” revenue expectations for 2020, while 32% said they “met” them. This coincides with the overall theme that total revenue numbers for this year’s key players were surprisingly up, coming in at a combined total for 2020 electrical design revenue that was 4.8% higher ($2.301 billion) than last year’s $2.195 billion for the year 2019.
As Freelancer Writer Tom Zind notes in the Top 40 special report, “Designs on the Future,” while 17 firms reported revenue declines from 2019 to 2020, a nearly equal number reported growth. This discrepancy could be due to several factors, including the ebbs and flows of project bookings, the fact that the full impact of the pandemic on business activity may not be fully revealed until 2021 is actually in the books, or result variations based on which firms fill out the survey each year.
Mirroring similar findings to EC&M’s survey, several other industry groups also released research that reports positivity, pointing to a pickup in electrical design proposals and stirring optimism in the AEC community that a fast turnaround from 2020 may be in store. Zind penned a recent online piece on this data, which suggests signs of a rebound are already in the works. In it, he writes: “One popular gauge, the Net Plus/Minus Index from PSMJ Resources, Inc., points to a sharp turnaround in proposal activity for the architecture/engineering/construction sector from Q4 2020 to Q1 2021, and a possible broadening out of market opportunities. Each of 12 major markets the index monitors showed a positive change between quarters, and each posted a high positive number — an indication of net reported increases in proposal activity from firms — for Q1 2021. In addition, all but nine of 58 major submarkets followed registered a positive number in the first quarter.” In this particular report, single-family housing and energy utilities topped the list of projected hot markets. Top 40 firms named health care, education, government, renewables, and power as their most active market segments for 2020, while (not surprisingly) hospitality, retail, food and beverage, and private office came in at the bottom. For comprehensive coverage on this year’s Top 40 survey results, read the full article. Especially insightful are several trends that came out in the analysis, such as which factors may have the greatest short- and long-term impact from the pandemic on electrical design firms, when business as usual will return, and how many respondents plan to make permanent modifications to the way they do business based on what they learned from the incomparable 2020.
