Quarterly Economic Snapshot Survey Quarterly Economic Snapshot Survey

Quarterly Economic Snapshot

Survey

Purpose• To take the pulse of the industry on a quarterly basis, determine trends, and become a

regular parameter of our industry’s economic conditions• Measure business activity in the most recent quarter compared to same quarter last

year, as well as sentiment about business conditions in the future for several business segments in the industry

• Business activity is defined as the changes (“up”, “even”, or “down”) in the dollar value of sales/services sold in major industry segments to applicable markets, during the 1st quarter of 2015 over the 1st quarter of 2014

• Future business conditions are measured by how the respondents feel (“optimistic”, “neutral”, or “pessimistic”) about their business for three future periods—the upcoming 6 months, coming year and next 2-3 years.

Methodology• Questionnaire is designed to measure these four indicators of business conditions in five major

business segments for both the DoD market and Federal Agency (excluding DoD) market• The five business segments include: Architecture, Engineering, Environmental Engineering,

Construction and Program & Project Management• Results of the survey are displayed for each business segment and market• A confidence index is calculated for each question; the index is equal to the percent of positive

responses, such as “up” or “optimistic,” plus one half the percent of “even” or “neutral,” converted to a base of 100

• A score of 50 or higher suggests expansion, while a score less than 50 indicates contraction• Not only will the value of the confidence index be important, the trend of each index will show

how business confidence changes over time

Survey Sample• A total of 963 respondents provided valid survey records, for a response

rate of 6.2% and an overall margin of sampling error of plus or minus 3.0% at a 95% confidence level

• To provide further insight into the business trends and conditions, the data was segmented using some demographic characteristics pertinent to both the company and the individual respondent including: location of the home office, geographic regions in which you do business, size of company in terms of both the number of employees in all locations and gross operating revenue in 2014, and level of responsibility of the person completing the survey

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Business Segments

Architecture

Environmental Engineering

Construction

Program and Project Management

Engineering

0.0% 20.0% 40.0% 60.0%

18.4%

27.5%

29.6%

29.8%

43.2%

27.7%

36.3%

38.0%

43.2%

55.3%

DoD Market Federal Agency (excluding DoD)

A majority (55.3%) of the respondents are involved in the Engineering–DOD Market, and a close second (43.2%) are involved in either Engineering–Federal Agency or Program and Project Management–DOD Market

Almost one-fifth (18.4%) of respondents is involved in Architecture-Federal Agency, while over one-quarter is involved in Architecture–DOD Market or Environmental Engineering–Federal Agency


Location

U.S.97.0%

Non-US3.0%

Location of Home Office

Northeast12.6%

South43.3%

Midwest17.4%

West26.7%

Region Where Home Office is Located in the U.S.


Geographic Regions in Which You Do Business

Region I (New England)

Region X (Northwest/Arctic)

Region II (Northeast & Caribbean)

Region VII (Greater Southwest)

Region VIII (Rocky Mountain)

Region V (Great Lakes)

Region VI (The Heartland)

International

Region IX (Pacific Rim)

Region III (Mid-Atlantic)

Region IV (Southeast)

All U.S. Regions

0.0% 10.0% 20.0% 30.0% 40.0%

8.5%

10.4%

11.5%

11.6%

11.8%

14.2%

16.6%

19.3%

21.1%

22.0%

27.2%

31.0%

Nearly one third of all respondents (31.0%) indicated they do business in All U.S. Regions, and a slightly smaller proportion (27.2%) does business in Region IV (Southeast)

Nearly one-fifth of all respondents (19.3%) does business internationally

A minority of respondents does business in Region I (New England), followed by Region (Northwest/ Arctic)


Type of New Employees Planning to Hire Within the Next 6-12 Months

Not planning to hire

Don't know

Part-time

Project specific

Full-time equivalent

0.0% 10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%

6.6%

10.0%

24.8%

28.3%

73.7%

Over seven in 10 respondents indicated they plan to hire full-time equivalent employees within the next 6-12 months, while about one quarter indicated they plan to hire either project specific or part-time employees

All in all, these percentages imply that more companies are expecting business to expand in the next 6-12 months

Recent Trends• Respondents, in general, were more confident about future business conditions than about

recent business trends, and the level of confidence was higher for longer future time horizons• The confidence index for recent business trends, for most markets, was in the 50’s, indicating

slight business expansion in Q1 2015 compared to Q1 2014• Most respondents indicated business performance was the highest for sustainment

restoration and modernization, and the lowest for disaster response, based on the value of the confidence index

• For example, 39.1% of respondents to the Engineering–DOD Market segment indicated sales were “up” in sustainment restoration and modernization compared to just 16.9% who indicated sales were “down”, producing a confidence index value of 61.1; On the other hand, the confidence index for disaster response was 45.6, indicating business contraction

Future Conditions• When asked about future business conditions, respondents were most optimistic about

business for the next 2-3 years, in all business segments, indicating expectations of business expansion at faster rates 2-3 years down the road than for the upcoming 6 month or the coming year

• For example, the confidence index for the sustainment restoration and modernization market within the Architecture–Federal Agency segment was 64.3 for the upcoming 6 months and 72.7 for the next 2-3 years, an increase of 8.4 points

• For ecosystem restoration in the same segment, the index jumped from 45.3 for the upcoming 6 month to 50.0 for the next 2-3 years, indicating respondents expect business conditions to move from contracting to barely expanding over these time intervals.


Confidence IndexENGINEERING–DOD MARKETSAMEQuarterly Economic Snapshot Survey

Sales/Services: 2015Q1 over 2014Q1 Business Conditions Business Conditions Business Conditions

Year-on-Year Trend Coming Year Next 2-3 Years

Number Up Even Dow n Index* Number Up Even Dow n

Confidence Index * Number Optimistic Neutral Pessimistic

Confidence Index * Number Optimistic Neutral Pessimistic

Confidence Index *

ENGINEERING - DOD MARKET

B1. Sustainment Restoration and Modernization (432) 39.1% 44.0% 16.9% 61.1 (437) 55.6% 35.2% 9.2% 73.2 (435) 58.4% 33.1% 8.5% 74.9 (436) 57.1% 37.2% 5.7% 75.7

B2. New Construction (385) 31.9% 45.5% 22.6% 54.7 (377) 45.1% 39.0% 15.9% 64.6 (376) 47.3% 38.0% 14.6% 66.4 (377) 46.9% 42.2% 10.9% 68.0

B3. Energy (295) 31.9% 52.2% 15.9% 58.0 (297) 40.1% 47.8% 12.1% 64.0 (295) 46.4% 44.1% 9.5% 68.5 (293) 47.1% 43.3% 9.6% 68.8

B4. Security (232) 18.5% 69.0% 12.5% 53.0 (229) 26.2% 63.3% 10.5% 57.9 (232) 28.4% 62.9% 8.6% 59.9 (229) 29.7% 60.3% 10.0% 59.8

B5. Infrastructure Security & Resilience (244) 26.6% 63.1% 10.2% 58.2 (242) 37.2% 56.2% 6.6% 65.3 (244) 39.3% 54.1% 6.6% 66.4 (240) 40.4% 52.9% 6.7% 66.9

B6. Water Infrastructure (277) 28.5% 56.0% 15.5% 56.5 (278) 36.7% 50.7% 12.6% 62.1 (278) 42.8% 45.7% 11.5% 65.6 (276) 43.8% 46.4% 9.8% 67.0

B7. Ecosystem Restoration (247) 15.4% 65.6% 19.0% 48.2 (251) 23.1% 63.3% 13.5% 54.8 (251) 26.7% 61.0% 12.4% 57.2 (245) 26.9% 60.8% 12.2% 57.3

B8. Disaster Response (217) 10.1% 71.0% 18.9% 45.6 (217) 12.4% 75.1% 12.4% 50.0 (213) 14.1% 76.1% 9.9% 52.1 (211) 15.6% 75.8% 8.5% 53.6

*The index is calculated by adding the percent of positive responses, such as "Up", to one half of the neutral ("Even") responses.

Upcoming 6 Months


Confidence IndexENGINEERING–DOD MARKET

0% 20% 40% 60% 80% 100%

Change insales/services - Q12015 over Q1 2014

Business conditionsfor the upcoming 6

months

Business conditionsfor the coming year

Business conditionsfor the next 2-3 years

39.1%

55.6%

58.4%

57.1%

44.0%

35.2%

33.1%

37.2%

16.9%

9.2%

8.5%

5.7%

B1. Sustainment Restoration and Modernization

Up/Optimistic

Even/Neutral

Down/Pessimistic

61.1

73.2

74.9

Confidence Index

The confidence index is calculated by adding the percent of positive responses, such as "Up", to one half of the neutral ("Ev en") responses. A score of 50 or higher suggests expansion or optimism, below 50 contraction or pessimism.

75.7

0% 20% 40% 60% 80% 100%



months



10.1%

12.4%

14.1%

15.6%

71.0%

75.1%

76.1%

75.8%

18.9%

12.4%

9.9%

8.5%

B8. Disaster Response

Up/Optimistic

Even/Neutral

Down/Pessimistic

45.6

50.0

52.1

Confidence Index

The confidence index is calculated by adding the percent of positive responses, such as "Up", to one half of the neutral ("Even") responses. A score of 50 or higher suggests expansion or optimism, below 50 contraction or pessimism.

53.6


Confidence IndexARCHITECTURE–FEDERAL AGENCY

0% 20% 40% 60% 80% 100%



months



27.5%

39.8%

48.5%

53.1%

55.7%

48.9%

40.2%

39.2%

16.8%

11.3%

11.4%

7.7%

A1. Sustainment Restoration and Modernization

Up/Optimistic

Even/Neutral

Down/Pessimistic

55.3

64.3

68.6

Confidence Index

The confidence index is calculated by adding the percent of positive responses, such as "Up", to one half of the neutral ("Ev en") responses. A score of 50 or higher suggests expansion or optimism, below 50 contraction or pessimism.

72.7

0% 20% 40% 60% 80% 100%



months



16.9%

17.2%

20.0%

23.1%

60.0%

56.3%

56.9%

53.8%

23.1%

26.6%

23.1%

23.1%

A7. Ecosystem Restoration

Up/Optimistic

Even/Neutral

Down/Pessimistic

46.9

45.3

48.5

Confidence Index

The confidence index is calculated by adding the percent of positive responses, such as "Up", to one half of the neutral ("Even") responses. A score of 50 or higher suggests expansion or optimism, below 50 contraction or pessimism.

50.0

Demographics and Economic Confidence• Measures of business trends and confidence varied with demographic factors, especially location

and size of the company• For those involved in sustainment restoration and modernization within the Engineering–DOD

Market segment, the confidence index (for recent changes in sales) was higher for those located in the U.S. than those located internationally

• Based on company size, business confidence increased, in general, with the number of people employed at all location up to 101-500 employees

• The confidence index also varied with the company’s 2014 operating revenue, with those with the smallest companies (less than $5 million of revenue) having the highest value (63.7) and those with the largest companies (more than $500 of revenue) having the lowest value (58.3)

• However, the confidence index was also relatively high for companies with $101.1 million-$500 million (62.7) and companies with $5million-$20 million


Demographics and Economic Confidence

Up Even DownConfidence

Index Count

39.1% 44.0% 16.9% 61.1 432

U.S. 40.3% 43.0% 16.6% 61.9 409

Non-US 10.5% 63.2% 26.3% 42.1 19

50 or less 36.8% 47.4% 15.8% 60.5 95

51-100 42.0% 40.0% 18.0% 62.0 50

101-500 44.2% 38.9% 16.8% 63.7 95

More than 500 35.6% 47.9% 16.6% 59.5 163Less than $5 mill ion

39.7% 47.9% 12.3% 63.7 73

$5 mill ion - $20 mill ion

42.9% 39.8% 17.3% 62.8 98

$20.1 mill ion - $100 mill ion

38.9% 41.1% 20.0% 59.4 90

$100.1 mill ion - $500 mill ion

41.2% 43.1% 15.7% 62.7 51

More than $500 mill ion 35.2% 46.3% 18.5% 58.3 108

People Employed by Your Company at All Locations

Company's 2014 Operating Revenue

B1. ENGINEERING - DOD MARKET Sustainment Restoration and ModernizationChange in Sales/Services: 2015Q1 over 2014Q1

All Respondents

Location of your home offi ce

Documents

Quarterly Economic Snapshot Survey Quarterly Economic Snapshot Survey