Architects in the US Industry Market Research Report from IBISWorld has Been Updated

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After a collapsing construction market significantly hampered revenue, a recovery in nonresidential and residential building construction will support growth; however, the industry will face strong competition from larger consulting firms that offer a broad range of services, including pre-design, planning, interior design and engineering services. For these reasons, industry research firm IBISWorld has updated a report on the Architects industry in its growing industry report collection.

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After recessionary declines, improved construction markets will revive revenue.

The Architects industry derives the bulk of its revenue from nonresidential building design. Only a small share of revenue is generated from contracts in the housing construction market; however, many small, regionally-based contractors rely on the residential real estate market. Revenue is generated from fee-based contracts from preplanning and design services for construction and building projects. In the five years to 2013, IBISWorld estimates that industry revenue will decrease at an average annual rate of 5.6% to $34.1 billion. Industry growth was dramatically affected by the recession, as it resulted in a deteriorating construction market and a decline in the number of building projects being planned. Furthermore, business bankruptcies and prerecession overbuilding caused an oversupply of commercial and industrial real estate.

Nevertheless, the construction market has recently shown signs of recovery. As a result, revenue for the Architects industry is expected to increase in 2013, as the value of residential construction is expected to rise as well. In addition, profit margins are expected to increase to 7.5% of revenue in 2013, up from a postrecession low of 2.8% in 2010. Still, profit margins remain below the 8.5% of revenue from 2008. To maintain margins, many large firms have taken cost-cutting measures, such as laying off workers. Consequently, the number of industry employees has fallen during the past five years.

This industry is characterized by many small-scale consultants, often individual proprietors and partners, that operate in narrow geographic markets. Nevertheless, most leading firms have expanded into international markets. Many firms have also started providing more value-added products to attract clients who are looking for one-stop design and construction companies. Despite expanding geographically and increasing the number of services offered, no firm holds a dominant position in the market. Currently, the industry’s three largest players are M. Arthur Gensler Jr. & Associates, Perkins and Will and AECOM Technology Corporation.

During the five years to 2018, industry operators will continue to benefit from improvements in the downstream construction markets. The volume of construction projects will increase as access to credit becomes more readily available to clients. Demand from nonresidential and residential construction is forecast to rise during the next five years. Similarly, industry revenue is forecast to increase in the five years to 2018. Industry operators will look to offer more value-added and environmentally friendly services as the level of competition grows from one-stop, full-service building and engineering firms. For more information, visit IBISWorld’s Architects in the US industry report page.

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IBISWorld industry Report Key Topics

Architects plan and design residential, institutional, leisure, commercial and industrial buildings and structures by applying their knowledge of design, construction procedures, zoning regulations, building codes and building materials. This industry also provides drafting services, which includes drawing detailed layouts, plans and illustrations of buildings, structures and systems.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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