Approved in May during ACEC’s Annual Convention & Legislative Summit, the new Market Intelligence Committee (MIC) aims to identify and analyze key market developments and trends affecting the engineering industry. This open committee also is charged with guiding the development of educational programming and resources for member firms operating in both public and private markets.
ACEC’s Executive Committee Chair, Dr. Gary W. Raba, PE, chief growth officer at Raba Kistner, appointed Mark Borushko, principal of Western Land Consulting Group, LLC, as committee chair. Mark Baum, partner at Barry-Wehmiller Design Group Commercial Strategy, was appointed vice chair.
MIC aims to enhance the current resources offered by the market intelligence team by providing more curated and timely content on markets within the engineering industry. It will guide programming, track trends, and help firms adapt to evolving market demands. If you would like to sign up for this committee, go to: www.acec.org/member-center/get-involved/committees/join-a-committee/.
“I am excited to serve as chair for ACEC’s new Market Intelligence Committee and help lead the committee to stay ahead of near- and long-term growth opportunities that lie before our industry,” Borushko says. “There has never been a more exciting yet challenging time for the engineering community. Consequently, it is incumbent upon us to be a catalyst for our nation’s growth and development. MIC will constantly look forward to better understand what lies ahead in all aspects of our ever-changing economy so we can best serve the needs of our clients.”
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Baum adds, “I look forward to the opportunity to collaborate with MIC to continue to advance and build upon the Market Intelligence and Industry Insights developed by the team. There has never been a better time to be an engineer, architect, or construction manager in the United States. The domestic landscape for engineering and construction services is ripe with opportunity, and MIC can provide focused insight to firms interested in harvesting that abundance.”
The current construction spending market for health care is worth $68 billion, up 3 percent from 2023, according to FMI. An aging population, growing mental health concerns, the increase in artificial intelligence capabilities, and rising obesity rates will drive demand for additional medicines, services, and facilities including hospitals, outpatient facilities, and medical office buildings. Here are the top five trends impacting the market today.
The surge in mental illnesses demands more facilities: One in 5 American adults (approximately 57.8 million) experienced mental illness in 2021, according to the National Alliance on Mental Illness. In 2023, 50 percent of adults ages 18 to 34 reported experiencing mental illness, the highest rate among the population, according to the American Psychological Association. Diagnoses of anxiety and depression increased by 25 percent during the first year of the COVID-19 pandemic, the World Health Organization reports. This led investors to begin acquiring behavioral health properties at a rapid pace, with investments worth $3 billion in the last 10 years, according to Colliers. This directly resulted in increased investment in three in-demand facility types: outpatient, inpatient, and residential.
There has been a notable shift from inpatient to outpatient care: The Urgent Care Association reports the number of urgent care centers (UCCs) grew 66 percent from 2016 to 2023. Outpatient volumes are expected to rise 26 percent over the next decade, according to the American Hospital Association. Demographics, consumer preference, and advancing technologies are driving demand for outpatient facilities. Medical outpatient buildings can include UCCs, labs, surgery centers, and mental health clinics.
M&A activity is on the rise: In 2022, there were 53 announced hospital mergers and acquisitions; in 2023 there were 65, according to a Kaufman Hall report. As interest rates begin to decline, telehealth demand continues to soar, and AI changes the health care landscape, new investors are expected to enter the market, creating the potential for further M&A activity that would allow health systems access to more capital and the potential to acquire innovative startups, expand market share, address labor shortages, and diversify services offerings.
Weight loss drug advancements are impacting biomanufacturing real estate: Drugs that were initially created to help manage patients’ blood sugar levels and lower the risk of cardiovascular problems associated with diabetes have become a growing weight loss trend. Prescriptions for these drugs increased by 355 percent from Q1 2020 to Q3 2022, according to Trilliant Health. This has led to increased investment interest in additional outpatient facilities that are required for diagnostic testing and follow-up appointments, as well as cold storage units to store the drugs until use.
More funding is needed for decarbonizing labs: Laboratories in the lifesciences sector require more complex infrastructure than traditional office buildings, including greater load capacity, higher floor-to-ceiling heights, and heavy-duty HVACs. These labs consume five to 10 times more energy per square foot than office buildings do, according to the EPA, and that requires substantial design from mechanical, electrical, and plumbing engineers. The Inflation Reduction Act contributes $64 billion in funding to sustainability and renewable energy updates, which could aid aging buildings within the sector on their path to reduce carbon emissions.
Commercial & Residential Real Estate
Intermodal & Logistics
Energy & Utilities
Health Care & Science+Technology
Economic Outlook
Education
The Market Intel column in Engineering Inc. focuses on the markets listed above, and information and insights on economic data relevant to the industry.
Diana O’Lare, CPSM, is ACEC’s director of market intelligence. She can be reached at dolare@acec.org.