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May 29, 2008

Billing rates at U.S. architecture, engineering firms remain stable

ZweigWhite’s survey finds rates rose only slightly over past year

NATICK, MASS.

Billing rates among U.S. architecture and engineering firms increased only slightly over the past year, a newly released report shows. According to ZweigWhite’s 2008 Fee and Billing Survey of Architecture, Engineering, Planning and Environmental Consulting Firms, billing rates across the 29 employee positions reviewed for the report rose an average of 1.5 per cent in the past year, and 19.7 per cent since 2004, which equates to a compounded annual growth rate of 4.6 per cent over the five-year period.

“Over the same five-year period, inflation rates in the U.S. have averaged about 2.8 per cent, so at face value it would seem that architecture, engineering, and environmental firm fees have experienced real growth of about two per cent a year,” says Ian Rusk, a financial consultant to the industry and head of ZweigWhite’s advisory services division.

“But inflation has been rising while billing rate increases have been falling. Since November of 2007, the U.S. inflation rate as measured by the consumer price index has been hovering at approximately four per cent, so a billing rate increase of only two per cent means we’re swimming against the tide, and the tide is winning.”

According to the survey, as a group this past year, civil, structural, mechanical, electrical, and process engineers’ billing rates fell an average of 2.2 per cent, while rates among firms’ top management — project managers, department heads, associates, senior associates, and principals — increased an average of 4.3 per cent.

Other findings from the survey show 77 per cent of firms update their billing rates annually, while another 13 per cent do so every two years.

Chicago-headquartered ZweigWhite provides management consulting and other services for the design and construction industry. It has additional offices in Natick, San Francisco and Washington, D.C.

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