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A EC firms have faced a flurry of changes in the past few years. From tax laws to workforce trends to COVID-19 impacts, leaders must manage increasing amounts of uncertainty. To gain some clarity, we spoke to Jamie Claire Kiser – a managing principal at Zweig Group – about trends affecting the AEC industry. Despite the uncertainty and impact caused by potential tax law changes, inflation, and the pandemic, forecasts are strong overall for the AEC industry for 2022. How to gain a competitive edge in 2022
Kevin Johns
WHERE THE AEC INDUSTRY STANDS IN 2022. In recent years, an economic growth cycle drove record backlogs while increasing profitability. Before COVID-19 there was a 10-year high, and by the end of last year metrics were back where they were, if not better, according to Kiser. Demand for AEC services is high with a stable outlook into the future. To successfully capture and deliver that work, industry leaders need to look more closely at their operations. Here are some of the key factors to watch in 2022: ■ ■ Private equity participation is on the rise, shifting focus from revenue to cash flow ■ ■ Higher valuations are attracting more merger and acquisition suitors
■ ■ Inflation is triggering adjustments in contracts, sales, and supplier relationships ■ ■ Pending tax changes are driving a higher pace of transaction activity and deal urgency ■ ■ Federal contracts through the infrastructure bill will influence backlog AEC STAFFING CONSIDERATIONS FOR 2022. Referring back to the economic drivers, there’s only so much cost containment you can do. At some point you have to focus on how to keep your people and compete for top talent. In the year ahead, many firms will need to address the human side of the business. Concentration of ownership and a pipeline of younger talent are big concerns.
See KEVIN JOHNS, page 4
THE ZWEIG LETTER FEBRUARY 7, 2022, ISSUE 1427
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