AEC Business Intelligence 10 Industry Statistics to Inform Business Decisions
Salary Report Regional salary differences Firms in the Central U.S. only raised salaries by 3.75 percent, while firms in the Eastern U.S. and Mountain-Pacific regions increased salaries by 6.7 percent and 6 percent respectively.
Every year, Zweig Group surveys thousands of AEC industry professionals, to compile the most comprehensive collection of industry research. This research is coupled with industry knowledge to produce publications on nearly every aspect of managing an AEC firm. These reports can be used to inform firm policies, benchmark financials, and set goals to achieve success. We’ve aggregated 10 industry statistics that will give you insight into the AEC industry to see how your firm stacks up and to help inform your business decisions.
0% 2% 4% 6% 8%
Increase in base compensation by firm size Engineering firms with more than 500 employees saw the highest year-over-year increase in base compensation – 8.7 percent versus 3.7 percent for firms with fewer than 500 employees.
Regional project manager salaries The average project manager in the Mountain-Pacific region had 17 years of experience and made $125,000. For the same role in the Central region we found the average project manager had 15 years of experience and made $111,000. In the Eastern region it was 14 years and $122,000.
Financial Performance Staff Tu rnover crept back up
Turnover crept back up after a decade low of 8.6 percent in 2020 to around 12.5 percent in 2022. This is despite many workplace models and firms in the AEC industry remaining more flexible than they were before the pandemic.
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Annual Growth Rate record high since 2006 The reported annual growth rate of 12.6 percent is the highest growth rate on record since 2006.
Principals, Partners & Owners Report Political contributions There has been a notable decline in the percentage of AEC firm leaders making political donations, particularly at the state and national levels. While 20 percent of respondents made contributions to local candidates, only 19 percent and 14 percent donated to state and national candidates, respectively. This shift suggests a reevaluation of priorities or confidence in the political process within the AEC industry.
Return on Equity back to historical values Return on equity came back to earth after a decade high of more than 27 percent in 2021. This last year we saw return on equity of 21.4 percent, which is more in line with historical values.
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Fee & Billing Report
Valuation Report
Billing rate hikes There has been a surge in billing rates, with 100 percent of respondents reporting fee hikes averaging 10 percent over the past three years. It’s encouraging to see this figure as it’s in line with the base compensation increases Zweig Group reported earlier this year in its 2024 Salary Reports of AEC Firms .
12% 16%
$90,000
Value per employee Zweig Group’s 2024 Valuation Report measures value per employee by dividing the determined value of a firm by its staff size. As AEC firms primarily sell their staff’s time, it’s widely recognized that personnel are their most crucial asset. This ratio highlights variations in firm value relative to staff size, encompassing all full-time equivalents, including management, design/technical, and administrative staff. Value/net service revenue The value/net service revenue ratio, calculated by dividing a firm’s value by its net service revenue, has increased to 0.64, indicating a rise in profitability for each dollar of service revenue as well as the close connection between revenue growth and firm valuation.aluations done for a potential or actual acquisition yielded values that were a 39 percent premium over minority level internal transaction values.
$86,000
0% 4% 8%
$82,000
$78,000
$74,000
$70,000
0.52 0.54 0.56 0.58 0.6 0.62 0.64 0.66
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M&A Activity Reports: Zweig Group tracks every M&A transaction that takes place in the AEC industry and reports on them on a weekly basis. This process allows us to stay up to date with the latest M&A trends in the AEC industry and report our findings to you. This report will detail some of the biggest trends and movements regarding M&A activity in the AEC industry. Zweig Index Reports : Tracking and reporting on the financial standing of some of the industry’s leading firms and publicly traded firms equip our audience with a greater understanding of the state of the industry. The Zweig Index is published monthly to offer our readers another digestible form of information to make better decisions for their business. Business insights from industry executives and leaders , including artificial intelligence, strategic planning, leadership, recruitment and retention strategies, and more.
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About Zweig Group Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, includ- ing innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competi - tive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.
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