280+ AEC firms representing $102 billion in revenues report on COVID-19's impact on backlog, projects, layoffs, and M&A

NEW YORK, April 20, 2020 /PRNewswire/ -- Industry-leading corporate finance and M&A advisory firm, AEC Advisors (www.aecadvisors.com), has been conducting bi-weekly surveys and CEO Forum webinars to analyze and discuss the impact of COVID-19 on the Architecture, Engineering, and Consulting ("AEC") industry. 

Over 280 AEC firms representing ~$102 billion in combined revenues (or ~90% of the North American AEC industry), participated in the most recent April 17^th survey, with a diverse cross-section of participants by size (i.e. ~20 firms generating >$1 billion in revenues, but also 97 firms with <$25 million), ownership (e.g. public, employee-owned/ESOP, private equity-owned), and markets (e.g. transportation, water/wastewater, infrastructure, buildings, oil & gas, environmental, etc.).  Additionally, 450+ CEOs and executives joined our 3^rd CEO Forum webinar as the CEOs of Arcadis NA, GHD US, and Murraysmith, shared insights in a 90-minute discussion on their current strategies and outlook.  

Survey highlights include:  

• Median "% of backlog delayed" stabilized at ~7.5% over the last two weeks; median % of backlog "earmarked for delay" also stabilized at ~10%

• 2020 revenues projected to decline slightly under 10% today, vs. slightly over 10% two weeks ago; earnings are projected to decline 10 - 15%, but it's possible that firms are underestimating the impact of revenue declines on earnings

• Private sector buildings projects face the most delays, while public sector infrastructure projects face the least delays

• Most sectors facing significant declines in project pursuits, implying a prolonged negative impact, likely into 2021

• 38% of firms have implemented layoffs/furloughs (up from 26% two weeks ago) and another 12% are still planning to make cuts.  However, the combined % of layoffs and "planned to make layoffs" has not increased from two weeks ago.    

• While some firms are billing more quickly, 82% are still billing monthly (vs. 91% pre-pandemic).  Whereas 72% of firms are expecting a slowdown in payments, only 39% are paying their own subconsultants and vendors more slowly – suggesting a negative cash flow impact.

• M&A activity expected to decline, although some firms are being more aggressive

Our next survey on April 27^th will capture the latest impacts of COVID-19, as well as growth and profitability metrics for 2019 (actual) and 2020/2021 (projections). 

Visit our website (www.aecadvisors.com/conferences) for upcoming webinars, including this week's speakers below:

• Gord Johnston, Stantec, CEO
• Alex L'Heureux, WSP, CEO
• Paul Gabriel, Environmental Partners, CEO
• Louis Armstrong, Kleinfelder, CEO

Contact: Tyler Albright, [email protected]

SOURCE AEC Advisors LLC

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https://www.aecadvisors.com/