Good news for Architecture & Engineering (A&E) firms large and small – financial performance remains stable across the industry as uncovered by the 39th Annual Deltek Clarity A&E Industry Study. That being said, the environment is not without challenges.
Overall, firms reported an increase in operating profit, but they also saw an increase in overhead rates coupled with decreases in utilization, net labor multiplier, and net revenue per employee. All of this indicates a stable, but potentially challenging environment. Here are a few of the key highlights from this year’s study:
- Average operating profit on net revenue was 13.2%, up just slightly from 13% last year
- Utilization rates dropped slightly this year to 59.4% from 60.0%
- The net labor multiplier saw a decrease to an average of 2.96, down quite significantly from a spike of 3.02 in 2018
- Firms saw a change in direction for overhead rates for the first time in five years, increasing from 154% to 155%
- The average collection period dropped by one day to 71 days
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