Education construction lag not new to coronavirus crisis

Research examines higher education facility project activity before and during COVID-19 campus closures

Times are tough for architecture, engineering and construction (A/E/C) firms working in education markets, but that was the reality months before the coronavirus pandemic resulted in campus closures and turned everyone’s focus to distance learning.

A survey of nearly 300 A/E/C professionals conducted March 22 to 31 found that 31.1% experienced a decrease in education facility proposal activity in the first quarter of 2020. Yet in the previous quarter’s survey, weak performance was already on the horizon, with 23% of professionals noting a decrease in activity. The education market had the worst showing of the 12 major markets assessed, and the first quarter result marked the first time that decreases in proposal activity outpaced increases since a 2008-2012 five-year span of year-end results near or below 0%.

The Quarterly Market Forecast (QMF) is conducted by PSMJ Resources, Inc., a publishing, executive education and advisory group that works with A/E/C organizations worldwide. Launched in 2003, the QMF is considered a solid predictor of market health.

“The uncertainty of when students will return to classrooms and lecture halls, combined with the need for social distancing that is causing delays in many nonessential construction projects, strongly suggests that proposal activity in the education markets will continue to lag for at least the next few months,” says Jerome A. Guerra, principal of The JAGG Group, which works with PSMJ Resources on communications.

Still, half of the respondents to the latest survey reported little to no change in activity.

“The crisis does present some opportunities,” says Guerra. “Social distancing requirements in the future, or even just a desire to encourage better hygiene practices in schools, are likely to cause clients to demand creative solutions for these design challenges. There are many other examples. Now is the time for campus leaders and education facility managers to collaborate with their design and engineering service providers to discuss ways to anticipate and incorporate the changes that this crisis will inspire.” That’s especially a good idea for campuses that won’t be open again until the fall or later, he adds.

Also read: COVID-19 worsening enrollment decline and facility growth disconnect

The report covers education overall as well as four of its submarkets, K-12, higher education, support facilities and labs. Higher education facilities went from first (+21%) to worst (-28%) among these submarkets in the first quarter, with 40% of respondents saying proposal activity weakened by more than 5% this quarter. Support facilities activity was at -17%, labs at -11% and K-12 schools at -7%.

If activity after the last recession is any indication, the education market may be slower to bounce back compared to other industries. Since 2012, however, “education has been a consistent, if not spectacular, market for a lot of firms,” says Guerra. “It was rarely among the top markets in the survey, but also didn’t find its way into the bottom five too often either.”

More information on PSMJ’s Quarterly Market Forecast can be found here.

Melissa Ezarik is senior managing editor of UB.

UB’s coronavirus page offers complete coverage of the impacts on higher ed.

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