Economic Expert Predictions for A/E/C Industry 

As local A/E/C firms looked forward to 2021 with anticipation of turning the page on 2020, predictions of what to expect in the economy began to emerge among many industry sources.

However, it must be noted that in recent recollection, we have not experienced such drastic behavioral changes in how we live; from the way we work, our recreation options, and how we quite literally navigate the world. Economists do agree these changes will continue to impact our economy and our ability to see and feel post pandemic recovery for some time come.  

However, it must be noted that in recent recollection, we have not experienced such drastic behavioral changes in how we live; from the way we work, our recreation options, and how we quite literally navigate the world. Economists do agree these changes will continue to impact our economy and our ability to see and feel post pandemic recovery for some time come.  

NAIOP WA recently hosted the 2021 South Sound Economic Forecast with speaker, Dr. Skylar Olsen, founder of Reimagine Economics and Principal Economist at ClimateCheck. Dr. Olsen gave voice to impacts that AHBL has been noticing among its portfolio of work; housing is booming despite the pandemic.  

She noted that aggressive growth in home values, throughout the South Sound Region is up 22%. This value increase indicates that those that held their jobs through the pandemic are feeling optimistic about long term remote work arrangements increasing their access to more affordable housing in Pierce and Thurston County. However, renters are faced with rising prices in Pierce County outpacing rent in Seattle. 

Another prediction from Consulting Engineer Magazine suggests a housing movement to lower density locations is a post pandemic trend. communities.  

AHBL has experienced growth in 2020 and 2021 in our housing market sectors including, multifamily, affordable housing, and single-family housing in response to historically low interest rates. Additionally, AHBL’s commercial/industrial sector, which includes distribution centers and warehouses, continues to sustain strong growth throughout Western Washington.  

What does all this mean for A/E/C businesses? 

Dr. Olsen summarized key indicators that may point to shifts among the region’s economy throughout the duration of 2021 and beyond: 
 

• Employment levels in Seattle is back to “pre-crisis” levels, but office space is looking toward more satellite offices, not office space throughout the downtown urban core 

• People who were able to keep their jobs are taking advantage of low interest rates to purchase homes, adding heat to the housing market and are taking advantage of moving into more affordable and less populous communities  

• Predicting a “"K-Shaped"-shaped” recovery for large firms with better access to credit which are more enabled to bounce back quickly; while the small to medium sized business may experience the “L-Shaped” recovery marked by cost cutting and a harder time accelerating back up to pre-pandemic productivity. 
   

• Traffic among physical retail stores is down significantly, but there are winners in a few places due to behavior changes brought on by the pandemic: 

  • Grocery stores; impacted by cooking at home 

  • Sporting good, hobby, music and bookstores as people return to their hobbies 

  • Home improvement stores are seeing increases in home improvement projects 

• A/E/C significant issues: 

  • Building energy standards 

  • Rent control 

  • Eviction moratorium – scheduled to be lifted March 31 

  • Lumber and materials pricing have gone wild with supply challenges and tariffs affecting pricing.  

  • Wages for construction including hazard pay due to COVID 19 has begun to stabilize 

Predictions for “back to normal” status? This may be a far-fetched ideal as the social, economic, and societal ramifications of the COVID-19 pandemic are impossible to predict at this time.  

Despite the unknowns, AHBL has experienced a surprising acceleration in our industrial portfolio.

“During Q4 of 2020, we saw the schedule on many clients' industrial projects accelerate to ensure permit submittal before the adoption of the new building code, which took effect on February 1st, 2021" said Dan Booth, PE, SE & AHBL President.

"We anticipated a leveling off of industrial design in February 2021 due to the acceleration of work at the end of 2020, however, new industrial work has continued at a brisk pace in Q1 2021. We now anticipate that this market will continue to be strong throughout 2021.” 

For the broader economy, experts look toward the summer of 2021 to begin showing a positive trend holistically with full economic recovery lagging for several months into 2022 and beyond.  

Sources: 

NAIOP WA – Economic Forecast 

Consulting Engineer Magazine: https://www.csemag.com/articles/21-predictions-for-2021-for-the-a-e-industry/