AEC Industry Trends to Watch in 2019

2019Looking ahead, after several years of strong economic growth and boom times for design professionals, there are several trends that I believe will be worth keeping an eye on.

Trend 1: A Coming Slowdown
While supply and demand still play a role in where and how much design and construction there will be in specific regions, other factors also have an influence. In my home state of California, there is still an acute shortage of housing and a steady need for new workplace facilities, yet the high cost of construction and rising lending rates have made many projects financially infeasible. This will not abate until there is a drop off in projects. Design and construction industry firms have had a great ride over the past several years but look for it to slow down in 2019 and 2020.

Trend 2: Off-site Construction
There are many start-ups in the market that are experimenting with off-site construction. The objectives are to reduce time and cost to build while increasing the consistency of quality of construction in a contained manufacturing space. While they are termed ‘disrupters,’ for an industry as traditional as construction, introducing new efficiencies is a good thing.

For design professionals to be able to engage with this trend as it scales up, it will require them to improve skills at designing buildings that can be fabricated in a manufacturing plant, trucked to the site, and installed with minimal effort. While prefabricated modules have been the Holy Grail for design professionals for many years, they have never scaled up successfully before. But with large amounts of venture capital invested in these companies, it’s time will come, and architects and engineers will need to flex with it.

Trend 3: More Integrated Teams
For years, integrated A/E companies have touted their integration as an advantage, resulting in more ingenious design solutions and better-quality drawings. However, the actual results often fell far short. Teams comprised of single discipline firms often worked more effectively than those with in-house integrated disciplines.

The next level of teamwork is seen in integrated teams composed not only of the design disciplines but also professionals from the build side. Often these mega-integrated teams are co-located in a ‘great room.’ This trend is being adopted in many locations. Even if it is just a passing trend, its impact is real.

The impact on architects and engineers is that their key staff are essentially lost to the firm for the duration of the project. If that weren’t bad enough, the pressure on the team in the great room is to collaborate in a way that they had not done before. Architects who formerly sat at their desks and sketched in their Moleskine journals now have to design in a public way and incorporate critique and suggestions not just from their consulting engineers but also from professional builders.

Given the traditional arms-length relationship between A/Es and contractors, changing habits will not be easy. This will be even harder for the construct side, which historically values speed and lower costs but not aesthetics. To be effective collaborators with architects, they will need to learn respect for their qualitative contribution to the team.

Trend 4: Alternatives to High-Cost Metro Areas
The irony of strong prolonged economic growth is a major increase in the cost to live in these fast-growing cities. This is especially true in my home, the San Francisco Bay Area. Job growth in technology and financial services fields and the new wealth that has resulted from it, tied with a serious housing shortage, has spiked housing costs to unaffordability.

In 2018, 574,281 California residents moved to other states. More than 225,000 of these people went to Texas, Arizona, Washington, and Oregon, where the cost of living is lower. For architects and engineers who are in their 30s and want to raise a family in a house with a backyard located in a good school district, achieving this American dream is not feasible on their salaries if they stay in these high-cost cities.

Some start-ups and established tech companies are allowing employees to relocate to lower-cost cities and stay employed with their company. We strongly advocate that design firms adapt their business model to keep the staff that they have invested in and trained. This means having remote workers anywhere and establishing additional offices in lower-cost cities.


Mark Cameron, Hon. AIA, is a Principal Consultant at Cameron MacAllister Group. If you are interested in learning how Mark can help your firm, contact him directly at 415-990-7883 or via email.

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