Happy with 2016 Business The revenue from architectural and related services during Q3 2016 was $17.231 billion, a 6% increase from Q2 2016, at $16.262 billion.  Total seasonally adjusted annual spending for construction during December 2016, was $1.182 trillion. Total public spending was $284.5 billion and private spending was $466.9 billion. After a strong 2016, The American Institute of Architects’ (AIA) Architecture Billings Index (ABI) for January 2017 registered the first monthly decline since September. Both inquiries in new projects and the value of design contracts increased during January.

Non-Residential Construction Remains Profitable The non-residential sector has been in the growth range since mid-2012; however, the sector is forecast to decrease from an estimated 5.8% for 2016 to 5.6% for 2017, and then to 4.9% for 2018. During 2016, construction spending increased almost 8%, with offices increasing more than 20%; hotel spending, approximately 25%; and retail and other commercial facilities, approximately 10%. Industrial construction was weak, with almost no growth. During 2017, office buildings are forecast to experience the most growth of all non-residential construction categories, at 10.6%. For 2018, education has the largest forecasted growth, at 6.7%.

More Heat in the Housing Market Total residential construction during December 2016 was estimated at an annual rate of $473.3 billion, a 0.4% increase from the November estimate and a 3.6% increase from December 2015, at $456.7 billion. January 2017 housing starts for privately owned housing increased 2.6% from December 2016 and 10.5% from January 2016. January 2017’s single-family housing units started totaled 823,000, 1.9% more than December 2016. January’s multi-family housing with five units+ started totaled 421,000, a 7.9% decrease from December 2016, but a 25.7% increase Y-O-Y.

Listening to Clients Is Crucial According to the AIA’s Q1 2016 Home Design Trends Survey, residential architects reported that 21% of their homeowner clients requested larger square footage, compared to 20% from the Q1 2015 survey. They also reported that 31% requested a larger kitchen size, declining from 35% from 2015. One of the kitchen’s primary purpose is as the technology hub of the home, with half of the respondents using it as a computer work and recharge station. Of the architects responding to the survey, 29% said that bathrooms were also increasing in size, and 32% saw an increase in the number of bathrooms. More upscale bathroom features are being requested, but accessibility remains the leading need. 

Designing and Building for Health and Productivity According to a September 2016 report from Dodge Data & Analytics, almost 75% of architects base their designs on the health impacts of buildings, which building owners say has translated into a 79% improvement of employee satisfaction and engagement. Building owners have a greater interest in healthier building features than many architects understand, as 61% of owners want enhanced ventilation, compared to 30% of architects understanding this need.  Of those architects responding to the report’s survey, 82% have a high level of interest in improving indoor lighting conditions and daylighting in their designs while 67% want to achieve enhanced thermal comfort and 65% enhanced access to natural features.

Advertising Strategies For those architectural firms of sufficient size and with sufficient advertising budgets, any TV campaigns will probably be most effective on evening news, financial news and upscale sports events: golf, tennis, horseracing, F1 motorsports, etc. Architectural firms may find it valuable to place ads in a healthy living section or pages on your station’s Website, promoting firms’ focus and expertise designing homes and other structures that maximize healthy interiors and natural lighting. As a low-cost marketing strategy, architects should certainly be seeking local opportunities to speak at business and community groups to share insights and ideas about how architecture enhances community spaces and better living and business opportunities.

New Media Strategies Research has shown that a LinkedIn page and email campaigns driving recipients to a blog and lead-generating downloads, such as whitepapers, are generally the most cost effective digital advertising combination for B2B businesses. Architects can easily create their own video stories in several “chapters,” showing the primary steps in designing a project, working with clients and contractors and how the design was brought to life in the finished project. Architectural firms can generate community goodwill and visual content for their Websites and social media pages by sponsoring a design contest for high school and/or college students with an appropriate scholarship to the winner.