Profit Margins for A/E Firms Reach New Heights

July 2006 » Business Briefs
Architecture, engineering, and environmental consulting firms have earned their highest profit margins in seven years, a new report shows. ZweigWhite’s newly published 2006 Financial Performance Survey of Architecture, Engineering, Planning & Environmental Consulting Firms indicates the median pre-tax, pre-bonus profit on net service revenue is now a record 12.5 percent, up from its previous high of 11.1 percent, set in 2001.

Architecture, engineering, and environmental consulting firms have earned their highest profit margins in seven years, a new report shows. ZweigWhite’s newly published 2006 Financial Performance Survey of Architecture, Engineering, Planning & Environmental Consulting Firms indicates the median pre-tax, pre-bonus profit on net service revenue is now a record 12.5 percent, up from its previous high of 11.1 percent, set in 2001.

Firms’ revenue per staff figures have also reached new highs-a median of $105,752 in net service revenue per employee firm-wide and $128,472 per professional/technical employee, compared with $84,808 and $104,220 in 2001, respectively.

Laura Rothman, managing editor for the survey report, says the upward trend is clear. "After some instability from 2001 to 2003, several of the profit measures hit a low in 2004," she said. "Since then, performance has steadily increased to bring us the record levels we’re seeing now. Firms have increased their revenues, profits, and multipliers faster than their overhead rates, contributing to overall stronger profit margins," Rothman added.

The 2006 Financial Performance Survey of Architecture, Engineering, Planning & Environmental Consulting Firms is available from the publisher for $395, plus $8 shipping and handling. To order, visit our website at www.zweigwhite.com.


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