Citing existing backlogs of work for well into next year, a panel of some of the country's leading architects suggested that the outlook in many practice sectors holds promise for 2003. The group cautioned, however, that growth may be uneven across the board and some firms may be heading for rougher times owing to fears of terrorism, conflict with Iraq, and a precarious economic climate.

The architects, speaking in Washington, D.C., at the annual North American Construction Forecast conference sponsored by Reed Construction Data (formerly Construction Market Data), highlighted economic and business trends to help architects, engineers, construction associates, and other allied professionals plan their business and marketing strategies for 2003.

The panel featured:
• Leo A Daly III, FAIA, chair/chief executive, Leo A Daly
• William Guerin, AIA, deputy chief architect, U.S. General Services Administration
• Hugh Hardy, FAIA, founding partner, Hardy Holzman Pfeiffer Architects
• Rod Kruse, FAIA, partner, Herbert Lewis Kruse Blunck
• Henry Mann, AIA, chair and chief executive, Perkins and Will
• Scott Simpson, FAIA, co-chair, Design Futures Council, and director and partner, Stubbins Associates.

Moderator James P. Cramer, Hon. AIA, Greenway Consulting chair and DesignIntelligence editor, asked each of the architects to offer their quick assessment of business trends and conditions for next year. The panelists agreed that hot areas now and into 2003 include health care, biotechnology, education, cultural institutions, and overseas opportunities in Asia, especially in China. Conversely, the panelists noted that growth in corporate, retail, and hotel construction is waning. They also suggested that finding top-notch architects is becoming increasingly difficult and that speed is becoming an increasingly important commodity to clients.

Regional projections
Boston: Simpson jumped in first, spoke enthusiastically about business opportunities for architects in the Northeast, and said he was "bullish about Boston." He likened the area to Swiss cheese in that it is "mostly solid with some holes in it." He said his firm is currently involved in a number of education, biotech, and health-care projects and stressed the strength of these sectors. He spoke of ongoing large-scale construction projects at universities and cultural institutions across the region and noted co-investment opportunities for biotechnology companies and universities that could result in more research parks and facilities design work.

Des Moines: Speaking about his home base of Des Moines, Kruse said his firm has not seen a slowdown in gross receipts because about 60 percent of its work is in higher education. "The rest of our strength lies in adaptive reuse and historic preservation," he said. Kruse also pointed to suburban low-rise office/warehouse space as another source of significant construction for Midwestern architects. "Overall, I see us holding steady. A year ago we seriously considered opening another office in the Midwest, not to find work but to find people. We've had a hard time getting top-notch people, other than those we recruit from the Midwestern schools," Kruse said. "We've got a lot of exciting projects, and we're very optimistic about the future."

Washington, D.C.: Daly pointed to three promising areas for 2003: aviation, government, and health care. Daly, whose firm is working with the federal government on airport security studies, said new regulations for transportation safety would necessitate design work at aviation facilities. Inquiries at Leo A Daly have reflected an increase in the recreation and gaming industry, but a decline in education work because donations to large schools have been hurt by the events of September 11 and the recession. Daly also highlighted his firm's continuing interest in China. He also said his firm has received more inquiries about design/build partnerships and green and sustainable architecture.

New York City: In the post September 11 environment, New York City's future is comparatively up for grabs, Hardy told the audience. His advice for firms looking to protect themselves in the uncertain economic climate is to "keep your feet in all buckets." He emphasized the opportunities that exist in the restoration, rehabilitation, and rediscovery of historical areas and noted that these projects, while they may not be glamorous themselves, are important because they help create identity for the buildings they surround. Hardy also indicated that as schools continue to age, they will be ripe for construction and renewal as they seek to upgrade their technology and respond to the notion that design can influence the way children learn.

Chicago: "With the exception of the corporate market structure, there is real reason for optimism in 2003" Perkins and Will's Mann said. Like Hardy, he expected that significant population growth would necessitate new school construction and renovation projects and that the need for teaching and research labs would result in higher-education and health-care projects. He cautioned about the general business climate and said practitioners should be careful about third-party reimbursement and the effects of reductions in philanthropy.

The federal government: The GSA is looking to expand its role as a tenant and increase its income from rent by eliminating low-performing buildings, according to Guerin. GSA will focus on modernization of its larger properties, "the big money makers for us, the ones that are the most useful for the federal government," he said. "We're going to be looking at getting rid of our low performers and a lot of those tend to be in the Midwestern areas. So our geographic forecast is to work around the edges." Guerin also indicated that GSA is planning to continue its successful Federal Courthouse Building Program, "tip-toe into design/build," and look for different and new ways to streamline its operations.

The need for speed and other trends for 2003
Simpson also focused on the quickening pace of architecture design. "More and more, clients are asking us to do things much, much faster." On a recent job, Simpson said, the firm "had to coin a new word for it—hypertrack—because we had just 28 days to do construction documents. We're doing another job right now that is faster then hypertrack, we're calling it 'psycho-track.' This is a 250,000-square-foot extremely sophisticated high-tech research space. Construction started on the first of September. Five weeks later, they're sending lab case work."

Simpson noted that clients care not only about speed, but also the value the design will bring to them: the utilization rates, efficiency of personnel, how they use their buildings, how they measure their operation costs, and the econometrics of design.

The panel also agreed on the importance of sustainable design and said clients are becoming more aware of the possibilities of design. Hardy said the state government in New York is aggressively pushing sustainable design. "It's all very healthy and an intelligent use of resources," Hardy said, adding that it is true that sustainable design can cost more money, and there are limits to what's possible, but "surely we can do a better job of using our resources."

The panel was concerned about client's access to capital, but was optimistic about the federal spending. Indeed, GSA's Guerin reinforced that perspective, saying that over the next years the agency expects to have access to $1.5 billion in construction money, a trend that he said he expected to continue into the future.

Copyright 2002 The American Institute of Architects. All rights reserved.