Where’s the plumber? Many firms report work in the pipeline but for some the pipes are clogged.
Press Release: August 9, 2011
FAYETTEVILLE, AR (August 9, 2011) —Despite recent news about slow economic turnaround, a surprising number of A/E/P and environmental consulting firms report an acceptable or increasing backlog of work.
An August 8 article in The Zweig Letter, ZweigWhite’s weekly management publication ran an informal online survey of AE firm leaders which asked them about their amount of work and methods used for obtaining it.
With more than three to four months of work in his firm’s backlog, one respondent, Joshua Carney, president of Carney Engineering Group, a nine-person structural engineering firm based in York, Penn. said, “this is the first time since around early 2009 that we have had a sustained backlog worth measuring. It has been holding or growing steadily for around four months now.”
The survey showed that no respondents were working to fill an empty pipeline. The majority of respondents, 57.1 percent, have more than six months’ work in their backlog. The rest of the respondents were evenly divided among each of the other three categories: five to six months, three to four months and one to two months of work.
Client selectivity and the careful weeding out of bad clients has been a key to success for a number of firms.
NelsonNygaard Consulting Associates in San Francisco, Calif., a 70-person engineering and planning firm, took a defensive approach. Paul Jewel, chief operating officer, said, “We were very cautious going into the downturn and weeded out a lot of the deadwood contracts.”
As a result, he is optimistic even through next year, and reports being booked for the next five to six months.
While business development efforts may be contributing to a steady backlog of work, factors outside a firm’s immediate control such as tighter banking practice and other economic factors, may prohibit some of these projects from coming to fruition.
Kleinfelder a 2000-person science, architecture, and engineering firm in San Diego, Calif., has a big backlog. William Siegel, president and CEO, says that this doesn’t necessarily lead to profits.
“We have a lot of projects, it is just getting them started that is the issue,” he said. Although the backlog is full, “the amount of projects on hold or contracted but not allowed to start are a much, much higher percentage of the backlog.”
“We are concerned about the current volatility in the economy due to the federal government being incapable of actual decision-making, disrupting the current positive direction of the market,” Carney said. “The other side of it feels like the water behind the dam starting to release, with projects which have been slow developing finally moving forward, and new private work looking like it is coming back, as well.”
For more information on The Zweig Letter visit www.zweigwhite.com/trends/thezweigletter