Produced in collaboration with ACEC, ACEC Canada, AIA and SMPS, the Deltek Clarity study serves as a benchmarking tool to help firms understand the state of the A&E industry and provides detailed insight and analysis into technology trends, business development, financial statements, project management and human capital management.
The report revealed that, after a banner year in 2022, firms are optimistic and expect another year of strong growth. However, even with continued growth and strong pipelines, the industry is still facing challenges, particularly when it comes to attracting and retaining talent, combined with increasing labor costs and rising inflation. Key findings include:
- Firms have strong pipelines, and are optimistic about the future, but growth must be balanced with market realities. Firms project 10.2% net revenue growth in 2023, down from 17.6%, and reported a significant increase in operating profit on net revenue – up 5.6 percentage points year-over-year.
- Technology is a key transformative factor in helping firms address challenges and give them a competitive advantage in the coming year. Firms anticipate a big jump in digital maturity in the next five years, with 82% of firms expecting to be in the "advanced or mature" stages of digital transformation in that time (vs. 69% reporting the same outlook last year). To help them get there, firms are continuing to not only integrate new technologies, but also better aligning business strategies with IT plans, with two-thirds of respondents prioritizing the creation of strategic technology implementation plans.
- Cybersecurity and IT infrastructure are top challenges. More than one-third of A&E firms identified cybersecurity as their number one challenge for the coming year, and a majority of respondents (56%) noted that implementing new security policies and procedures are a top priority for addressing firms' IT operational challenges. Additionally, one-third of firms are either having difficulties migrating operations to the cloud or anticipating a struggle when managing legacy systems already in place.
- Staffing issues present difficulties. Although staff growth doubled year-over-year, staffing shortages remain the number one challenge facing A&E firms over the next three years. Firms are struggling to fill positions and onboard people fast enough to keep up with demand. Additionally, in a new metric for this year's study, 36% of respondents cited candidate competition as a concern when attracting and retaining talent.
- Strong forecasts will require more strategic pursuit planning. After a strong year financially, firms are expecting another strong year based on forecasts, with a 10% growth forecast expected for 2023. And, while firms are submitting fewer proposals, firms may be more selective in the projects they pursue based on capacity and profitability. Nearly 70% of respondents also noted that finding time to nurture client relationships is a top challenge.
"The architecture and engineering industry had a great year financially last year and has a very optimistic outlook for the year ahead. Firms also have aggressive digital transformation goals, which is great to see," said Megan Miller, Director of Product Marketing at Deltek. "However, this year's report highlights a lack of confidence in managing projects, specifically around schedule management, and a shift to career planning and upskilling rather than just recruiting. Now is the time to focus on process improvement, improved visibility and collaboration to better position firms for success in the year ahead."
The full report is now available to download. To learn more about this industry market research, join the Deltek Clarity Architecture & Engineering webinar on May 18.
About Deltek
Better software means better projects. Deltek is the leading global provider of enterprise software and information solutions for project-based businesses. More than 30,000 organizations and millions of users in over 80 countries around the world rely on Deltek for superior levels of project intelligence, management and collaboration. Our industry-focused expertise powers project success by helping firms achieve performance that maximizes productivity and revenue.
www.deltek.com
View original content to download multimedia:
https://www.prnewswire.com/news-releases/deltek-releases-the-44th-annual-deltek-clarity-architecture--engineering-industry-study-revealing-continued-positive-performance-despite-increasing-costs-and-talent-challenges-301827991.html
SOURCE Deltek
| Contact: |
| Company Name: Deltek
Deltek Media Relations Team Email Contact |
