DGC, a division of PKF O’Connor Davies Releases 18th Annual Architectural and Engineering Studies

Studies feature benchmarking data and industry insights for firms engaged in architectural and engineering activity

DGC, a division of PKF O’Connor Davies, LLP, one of the nation’s largest accounting, tax and advisory firms, today announced the release of its 18th Annual Architectural and Engineering Studies. Launched on the heels of the 2022 Architectural & Engineering Summit, the two studies contain financial and operational data derived from the A&E firms that participated. The studies reflect the current state of the industry and provide important benchmarking data for firms to focus on to improve profitability and continue to grow and operate successfully in the current business environment.

“We’re extremely proud to release the latest editions of these studies, which will serve as valuable resources for our clients and those they work with,” said David M. Sullivan, Jr., Partner and Leader of the Architecture & Engineering Practice at PKF O’Connor Davies. “As these studies attest, the architectural and engineering industry has fared very well despite the economic turbulence of the last few years. Now more than ever, it’s crucial that firms have the tools and talent in place to maintain a strong financial foundation and grow their businesses.”

Through various measures of productivity and profitability, the studies provide an overview of the average firm’s results from operations in 2021. Members of the Firm’s dedicated Architecture & Engineering Practice have analyzed this data to identify trends in the industry using key indicators that firms can use to benchmark their performance against. This often leads to the identification of areas that firms can improve upon and best practices they should be adopting.

As the studies reveal, the average A&E firm saw an increase in the breakeven multiple and overhead rate as firms spent more getting back to normal operations; albeit in a hybrid working environment. In addition, the war for talent continues. Rising base compensation rates and staff bonuses to meet employment demands also contributed to the increased breakeven multiple and overhead rate. Overall project profitability, as evidenced by the billing multiplier, remained strong.

During 2021, firms continued to pursue the benefits provided by pandemic-relief programs, including the second round of the Paycheck Protection Program (PPP2) and the Employee Retention Credit (ERC). These benefits helped strengthen many firms’ balance sheets, as evidenced by the strong working capital to net fee ratios depicted in this year’s studies. Working capital is the lifeblood of an A&E firm, and this strong position will help many firms weather future economic challenges. Lastly, this year’s studies also feature new statistics around IT, cybersecurity and remote working.

To access, download and read the 18th Annual Architectural and Engineering Reports in their entirety, visit the following links: Architectural Report and/or Engineering Report