Deltek’s 2023 AE Clarity Report
Deltek has been conducting its annual survey of firms in the Architecture & Engineering industry for the past 44 years, providing valuable insights into key performance indicators, market conditions, and industry trends. The latest edition of the Clarity Study, based on 2022 fiscal data, encompasses responses from 583 participating firms across the United States and Canada, representing a diverse range of sizes, disciplines, and shapes. By collaboratively identifying key performance indicators and industry trends, the study allows firms to benchmark their performance effectively.
The overall outlook for the industry remains positive, although growth is expected to moderate compared to the peak experienced in 2022. However, amidst the continued growth, firms are grappling with various challenges. Strong project pipelines are countered by rising labor costs, staffing shortages, and inflationary pressures affecting project delivery efforts. Firms are now required to adopt a more strategic approach in selecting projects. As growth prospects remain positive, there is a clear need for increased investment in these areas.
Firms of all sizes have recognized the significance of creating a strategic plan to implement technology initiatives that address challenges and provide a competitive advantage in the coming years.
SN thanks Deltek, ACEC, ACEC | Canada, AIA, and SMPS for their contributions and coordination of this year’s study.
Highlights from this year’s study include:
- Operating profit on net revenue rose more than five and a half percentage points in 2022 to 18.4%
- 53% of AE firms see project management as a key area of investment in the next 12 months
- Net revenue growth decreased by 7.4% from the post-pandemic high in 2022 but remains strong considering the previous year’s performance baseline.
- Firms reported that nearly 60% of projects were on or ahead of
schedule, up over one percentage point year-over-year.
- With staffing still a challenge and the cost of new hires growing, firms must focus on developing and cross-training existing staff to deliver projects.
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