Business owners are increasingly discovering the benefits of working with design-build firms, according to a comprehensive new study on the design-build market released by Food Marketing Institute (FMI). The study found design-build now makes up almost half of all construction projects nationwide, and market share is expected to keep growing over the next three years.
Research showed design-build use has not only expanded across all sectors and regions of the U.S., but owners who used this project delivery method were more satisfied with their experience compared to other methods due to advantages like innovation and quick speed to market.
Here are the key takeaways from FMI’s study on the design-build market now and where it’s headed in the next few years.
1. Design-build spending and market size continue to grow
By 2020, the U.S. nonresidential construction market will spend more than $550 billion annually, and design-build is poised to command more dollars and market power. Design-build spending is anticipated to grow 17 percent from 2018 to 2021. The study predicts market share will also expand, with design-build estimated to account for 45 percent of all spending in the nonresidential market during the same time period.
The study also looked at which regions will have the most growth in construction activity. The Mountain, Pacific and South Atlantic census divisions are anticipated to have the highest growth rate. In general, construction activity is becoming more concentrated in a limited number of markets with large or growing populations.
2. More businesses are assessing alternative construction methods to meet project demands
Many owners traditionally employed design-bid-build as the project delivery method of choice, but changing needs and project demands have made them more open to exploring options like design-build. When selecting a project method, owners said delivery schedule is the most influential factor on their final decision. Other important factors include owner goals and objectives, contractor experience and initial cost.
As business leaders become more knowledgeable about design-build and its benefits, they are more likely to employ it as a preferred delivery method. More than half of owners surveyed indicated they are using or anticipate using design-build in the next five years, and the majority of owners believe design-build utilization will continue expanding.
3. Owners report high satisfaction with design-build projects
Experience with design-build was rated highest across all project delivery methods, with 76 percent of owners reporting their experience as excellent or very good. Owners identified the top benefits of working with a design-build firm as increased opportunities to innovate and the ability to fast-track a project. However, design-build was associated with a host of other benefits, including a more collaborative process for the owner, a final cost closest to the budget, and highest quality of service. Many owners first utilize design-build for large projects, but they are increasingly turning to design-build firms for smaller projects with a budget less than $25 million.
As owners gain exposure to the advantages of design-build, we can expect to see more organizations using this collaborative delivery method to streamline projects, save money and improve safety through innovative solutions.
To read the full FMI report, download it here. If you have questions about the design-build method or if it’s the right choice for your next project, feel free to email me at firstname.lastname@example.org.