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Business Improving for A/E/P and Environmental Firms

Design firms have been among the hardest hit by the recent recession, but new data show the carnage may be coming to an end.

According to business-management-services provider ZweigWhite's recently released 2011 Financial Performance Survey, while an increasing percentage of architecture, engineering, and planning (A/E/P) and environmental consulting firms have cut staff in recent years, the percentage of firms reporting layoffs over the previous year decreased from 70 percent in 2010 to 57 percent in 2011. The survey also finds that despite a slew of layoffs in recent years, the ratio of professional or technical staff to administrative staff has remained steady for the last 10 years, hovering between 4.8 and 5.0 to 1.

“The A/E/P and environmental consulting industry portends the rest of the economy," Mark C. Zweig, ZweigWhite’s founder and chief executive officer, said. "If they’re doing well, everyone else will be doing well.”

The survey also reports third-party-interest-bearing-debt-to-equity ratio—a measure of a firm’s ability to meet its long-term obligations to financial institutions—remains at a six-year low of 0.1 to 1. The median ratio was 0.3 to 1 in 2004. In 2005, it dropped to 0.2 to 1, where it stayed for the next four years, until reaching its present rate in 2010.

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