PSMJ’s latest research shows that overall proposal activity in the architecture/engineering/construction (AEC) space remains relatively stable. PSMJ’s latest Quarterly Market Forecast (QMF) surveyed 176 AEC executives (data collected between December 31, 2024 and January 20, 2025) and revealed an overall proposal activity Net Plus/Minus Index (NPMI) value of 20.9, which is slightly higher than the NPMI value of 15.8 for the same period one year prior. Any NPMI value above zero indicates that more respondents are seeing an increase in proposal activity compared to the prior quarter (+100 indicates all respondents are seeing an increase in proposal activity, -100 indicates all respondents are seeing a decrease in proposal activity). Since proposal activity is a leading indicator for backlog, revenue, and—ultimately—cash flow, the latest NPMI values provide a valuable glimpse into cash flow over the next 12 to 24 months.
To provide additional clarity on specific market movements, the Quarterly study also tracks NPMI values in 12 key client markets and 59 submarkets. “The struggle for quite some time now has been in the Commercial Development market and, more specifically, the Office Buildings submarket within that,” states PSMJ President Gregory Hart. He added “Many had hoped that the interest rate cuts that made headlines in 2024 would be exactly what that sector needed to find a bottom, but our QMF data shows that has provided little relief. It will certainly be a long-term play to bet on any sustainable growth there.” In this most recent survey, the Office Buildings submarket NPMI landed at -27.8 and has remained deeply in negative territory since 2022.
“On the flipside, the QMF data clearly shows that the hype around Data Centers is certainly real as AI-driven demand has pushed this submarket’s NPMI value to its highest level in more than a decade,” commented Hart. “The Renewable Energy submarket also continues to deliver very strong numbers, but we have a new Presidential administration in Washington now and they are already taking actions to shift priorities around energy production.” Will this mean an end to the strong performance in the Renewable Energy market? Hart isn’t so sure, “There is so much demand for energy that renewables almost surely need to be some part of the mix here. Of course, what exactly that looks like remains to be seen. Beyond renewables, we’ll continue to watch for impacts on the AEC momentum from new priorities such as immigration reform, tariffs on international trade, and whether more and more ‘Return to Office’ policies act as a tailwind for the Office Buildings market. It will be a busy year.”
The following table summarizes the latest NPMI values by client market in the most recent period compared to the same period from one year ago:
The strongest markets in the QMF survey are:
PSMJ PRO members get access to the complete Quarterly Market Forecast report that includes data on 50+ submarkets to dial in strategic moves on business development, recruiting, acquisitions, and more! Not a PSMJ PRO member yet?
Join today at psmj.com/psmjpromembership.