Zweig Group has released the 2022 Financial Performance Report of AEC Firms.
This report is a comprehensive, data-based industry resource on the financial performance, financial departments, challenges, methodology, and financial practices of AEC industry firms. This report contains key financial statistics, personnel costs, trend data on spending, and additional financial topics on everything from financial software use in AEC firms to cash flow reports. This report can be used to benchmark key financial metrics for any AEC firm, evaluate firm performance, and make strategic choices. The 2022 report was compiled with financial data gathered from participants for the 2021 fiscal year.
A few of the more intriguing trends were found within the individual line items of total general & administrative overhead costs. After a year where travel was extremely limited across the country, 2021 saw travel & entertainment expenses increase to 0.7% of net service revenue (NSR) from 0.4% in 2020. This percentage was typically around 1.1% before the pandemic.
Rent & utility costs as a percentage of revenue decreased to a decade-low 4.4% in 2021 (down from 5.0% in 2020). There are a variety of reasons this trend may exist including rising rent costs nationwide and the ability of firms to recruit to a work-from-home model, leading to the willingness of firms to downsize office spaces. As firm leaders continue to figure out what workspace model works best for their company, future decisions can be made on office space(s) as well as recruitment strategies.
Many firms received their first and/or second iteration of funding from the Paycheck Protection Program (PPP) during the first half of 2021. This funding was typically placed in the “Other Income” section on the income statement, which led to some interesting trends in the overall analysis. Other Income jumped from 0.1% of NSR in 2019, to 2.4% in 2020, and now to 4.9% in 2021. This led to stark differences in any metrics relative to pre-tax, after-bonus profit between 2019 and 2021.
The 2022 Financial Performance Report of AEC Firms provides insight into the 2021 fiscal year and will allow firm financial leaders to gain a unique perspective on where they stand relative to the industry. For more insights or questions regarding the report, please contact Zweig Group’s research department at research@zweiggroup.com
