Architectural Services Industry Profile

Companies in this industry plan and design residential, institutional, leisure, and industrial buildings and spaces, as well as landscapes. Prominent firms include AECOM, Gensler, HDR, HOK, and Perkins + Will (all based in the US), as well as Nikken Sekkei (Japan) and Stantec (Canada).

Internationally the market for architectural services has been sluggish overall due to the global economic downturn, but improving market conditions is helping boost global construction investment. A 3.6 percent compound annual growth rate for the global architecture services industry is expected through 2015, according to Infiniti Research. Many large US firms have international offices.

The US architecture industry includes about 30,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $30 billion. High growth is forecast for the next two years. Key growth drivers include increased construction activity.

COMPETITIVE LANDSCAPE

Demand for architectural services depends heavily on the volume of residential and commercial construction. Because most costs are fixed, profitability depends on a constant inflow of work. Architectural firms are often small because there are few economies of scale in the industry: architectural design costs for a large company are typically greater than for a small company. The industry is highly fragmented: the 50 largest firms account for less than 20 percent of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Architects prepare detailed plans that can be used by construction companies to build or modify various types of structures. Most ...