Healthcare Remains One of the Strongest Markets for A/E/C Firms

By Jerry Guerra

NEWTON, Massachusetts – Proposal activity for Healthcare facilities reported by architecture, engineering and construction (A/E/C) firms continued at elevated levels in the second quarter of 2019, according to the Quarterly Market Forecast (QMF) from PSMJ Resources.

The Forecast’s Net Price/Minus Index (NPMI) for firms working in Healthcare rose from 50% to 52%, quarter over quarter. PSMJ’s NPMI measures the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease.

For all Healthcare facilities, only 7.7% of respondents said that proposal activity declined, compared with 59.3% that saw an increase. Proposal activity for the remaining 33% was relatively stable, quarter to quarter.

Among the Healthcare submarkets measured, Continuing Care Facilities such as treatment centers and nursing homes scored a remarkable 70% NPMI, the highest among 58 submarkets across 12 major sectors measured in the QMF. Since reporting an anomalous negative 2% in the first quarter of 2013, the NPMI for CCFs has been above 50% for 23 consecutive quarters.

Medical Offices continue to show solid growth as well, with a second quarter NPMI of 51%. This marks 23 straight quarters above 30% for this submarket. Hospitals (27%) and Medical Laboratories (26%) show less robust growth in proposal activity, but are up slightly over the previous quarter (24% and 25%, respectively).

Healthcare was the third-strongest major market in the second quarter of 2019, trailing only Energy/Utilities (62%) and Housing (59%).

PSMJ has been using the QMF as a predictor of the A/E/C industry’s health since 2003. The company chose proposal activity to gauge the industry’s long-term outlook because it is the earliest stage of the project lifecycle.

About PSMJ

For more than 40 years, PSMJ Resources, Inc. has been recognized as the leading publishing, executive education, and advisory group devoted completely to improving the business performance of A/E/C organizations worldwide. PSMJ’s sought-after expertise covers a range of critical business areas such as project management, financial management, human resources, business development, transition planning, and mergers and acquisitions.

Jerry Guerra serves as a principal for PSMJ Resources.

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