...in that sector: "We have such crying need for infrastructure here in the U.S. that to diddle around for two years over a few billion dollars is a crying shame."

Watts says that the industry has been fighting for so long to get the best possible bill, that a slow sense of battle fatigue has set in. "State DOTs are at the point that they will accept whatever passes so they can finalize plans and get going on badly needed programs," he says.

But not everyone is seeing the reauthorization stall hurting projects. "It’s a very busy time for us in the transportation market in the West," says Evans. "Oregon and Washington passed a number of transportation initiatives, and California has seen some new work, too," he says.

A number of states have moved forward with their own transportation programs, says Hirschbrunner of HDR. "Most states are in better shape this year than they have been in the past three years," says Jon Feinstein, senior vice president of VHB/Vanesse Hangen Brustlin. This has put these states in a better position to leverage federal funding once reauthorization passes, he adds.

The airport market continues to tempt, but there still are uncertainties related to health of the airlines. "The big question is how will the situation with United Airlines and USAir shake out," McNulty says. The financial troubles of those airlines and a few others have some firms worried that major terminal projects may not get off the ground. "Another interesting issue is that, if major carriers go under, what will happen to their hubs?" he asks.

However, there are major airport projects out there. "We are working on the Jet Blue terminal at JFK Airport," says Gensler. His firm also is designing

a 27-gate expansion at Detroit International. And VHB is doing environmental impact statements for several airport expansions at Philadelphia International, Baltimore-Washington International and T.F. Green Airport in Warwick, R.I., says Jon Feinstein, senior vice president for VHB.

Developing Story

One big and active design market is in land development. As migration to the Sunbelt grows, firms are busy planning and designing housing and commercial developments as well as the underlying infrastructure to support them. "It’s been a good market for so long, and we’re taking advantage of it," says Watts of Carter & Burgess. The most active markets are in Florida, Texas, Arizona and California. "We know it can’t last," he says. "Every time [Federal Reserve Chairman] Alan Greenspan speaks, we listen."

Some firms are finding land development opportunities as cities work to attract new residents and businesses. "We are seeing communities looking to restore sites around canals and railroads to bring back green areas and make them attractive for development," says Cowdrey of Jones & Stokes. His firm is flourishing on environmental assessment work for brownfields and similar waste sites.

School Days

Schools are a bright spot in the general building market. "On the K-12 side, people are still passing education referenda," says Moynihan of Heery. He says the market will be driven by demographics at least through 2008.

That is generating a new demographic-driven market in higher education. "That market is surprisingly strong," says Whitney of Albert Kahn. One such job was the restoration of Hill Auditorium, built in 1913 at the University of Michigan. "It had perfect acoustics, but no air conditioning," he says. It was feared a major renovation would hurt acoustics. Whitney says the restoration went without a hitch and the design won the 2005 Honor Award for Architecture from the American Institute of Architects.

One driver for work in higher education is in science research facilities. "The Human Genome Project has been sparking more interest in academic research facilities," say Shepley Bulfinch’s Wedge. "We’re seeing more [National Institute of Health]-funded projects that are more research oriented." The firm is designing one such project for the University of West Virginia, she says.

On the commercial side, office building remains slow. But renovation work is showing some sporadic strength. "Back in the late 1990s when leases went out of sight, a lot of tenants were forced to settle for second-class office space," says Gensler. "Now those leases are up and they are interested in moving to better space." He adds that a rash of corporate mergers have fueled renovation work.

Sustainability issues continue to be a large factor in general building design. "More of our clients are trying to wrap their minds around the concept of sustainability," says Wedge.

Gensler agrees but contends that there’s a growing belief that [Leadership in Energy and Environmental Design] certification may not be the only way to go. "There are some problems with the documentation and some resistance to costs involved," he says. As a result, many projects are using green building concepts and techniques without going for full LEED certification. He also is encouraged that more product manufacturers and contractors are considering environment needs.

On the manufacturing side, the market continues to be slow but may rebound as international companies begin to invest in the U.S. market. "The only really active market is in research and development facilities," says Whitney of Albert Kahn Associates. "Much of this is for international firms doing R&D work for the U.S. market."

Olsson Associates has found new building niches to compensate for sagging markets elsewhere. Private sector work is now half of its revenue total, up from 25% in past years, says Roger Severin, chairman and CEO of the firm. Building big box stores and shopping centers in the Midwest has replaced slowing work in transportation and water resources. "Many municipalities have been delaying projects," he says. "Private sector land development is now the driving force. For the economic times, we did pretty well."

Kahn also is doing work in a nontraditional building market niche–plant closings and decommissioning. "We have clients who are looking to recoup as much as possible out of obsolete facilities as they close them out," Whitney says. Kahn also has branched into facilities management, including a plant for AM General, the manufacturer (with General Motors) of the Hummer vehicles. "Design has lived for too long in a narrow niche in a facility’s life cycle. We are breaking out of that," he says.

Business is booming for firms in the water and wastewater markets but there is a touch of concern as well. "We’ve got an aging infrastructure that needs to be addressed now," says Hirschbrunner of HDR. "There’s lots of work out there. Like the old ad said: ‘You can pay me now, or pay me later.’ Well, it’s now later, and the bill has come due."

Dee of Malcolm Pirnie says that while needs are great and local tax revenue is beginning to pick up, the biggest challenge will be federal funding for water and waste programs. "The economy is growing again, but not to the level of a few years ago," he says. But federal funding priorities, particularly relating to the war in Iraq and against terror, could reduce U.S. infrastructure funding.

The strengthening desalination market already has attracted Black & Veatch. "Desalination is a global issue, but we are seeing more interest in U.S. coastal cities, particularly in Florida and California," says Mastalio. Black & Veatch has combined its technologies and expertise in both water and power markets to develop a new technology for mid-sized desalination plants. "We are applying for a patent on the process," he says.

Signs of Light

The power market has suffered from overcapacity for several years and only now seems to be showing signs of life. But the skyrocketing cost of natural gas has led to resurrection of coal-fired plant construction. "We have a contract pending for a 700-MW coal-fired plant for the Omaha Public Power Project in Nebraska City, Neb.," says Mastalio.

Bechtel also is seeing a surge in interest in domestic coal-fired plants. "We have a standardized design for coal-fired plants," says Jude Laspa, executive vice president. Bechtel also works in alliance with General Electric, which bought technology from Conoco-Phillips for controlling plant emissions. Bechtel is working on the 1,230-MW Elm Road coal-fired plant for Wisconsin Electric.

In other power sectors, Fluor was recently chosen to complete a 1,200-MW gas-fired combined cycle powerplant in Clark County, Nev., for Nevada Power Co. The partially built plant had been deferred two years ago by Duke Energy. On April 5, Fluor also was awarded

a contract to complete the partially built 570-MW combined-cycle Luna Energy Facility for Tucson Electric Power Co. "This is a sign that the power market is beginning to come back in some areas," says Fluor’s Sambles.

The power transmission and distribution market may finally be poised for take off in the U.S. market. "It took about 18 months after the blackout in the Northeast, but we are finally seeing some money showing up for transmission work," says Mastalio.

Going Abroad

In some of the largest international projects, risk has been a fact of life for years. Some major firms have seen an increase in joint ventures to help manage risk in lump-sum engineer-procure-construct megaprojects. But not everyone sees this as the best approach. "Our best scenario is to control the whole project to best manage the costs and risk of a project," says Laspa of Bechtel. "We prefer to self-perform the engineering and direct hire and manage the contractors."

Around the world, the Middle East region continues to be hot for many reasons. "We’re doing quite a bit of work in Iraq, working as part of a joint venture on the reconstruction of the power system there," says Schneider of PB. "We have a lot of work there and we are finally seeing it begin to ramp up," adds McNulty of Parsons. The company is working on planning and design of 14 new or re-habilitated hospitals and 120 clinics. "They’ve gone from the planning stage now to the design phase," he says. But McNulty notes that there still are security and political concerns in Iraq, even after the national elections. "It’s still a dangerous place to work," he says.

For some firms in Iraq, long-term relationships have helped control security risks. "From our standpoint, Iraq is still a dangerous place," but about half of Bechtel’s engineers there are Iraqi born, Laspa says. "We’ve had people who worked for us there 20 years ago show up, either as Iraqi citizens or expatriots looking to work for us again in their homeland," he adds. Iraqi engineers and technicians are not readily identifiable as potential targets for terrorists, Laspa says.

Rising oil prices have put the entire Persian Gulf market on the fast track. Fluor is doing front-end engineering for a new refinery in Shuaiba, Kuwait, with an initial capacity of 450,000 barrels a day, says Sambles. Bechtel is working on a major aluminum smelter in Bahrain, says Laspa.

But the work is not limited to oil and natural resources projects in the region. "We are seeing a broad variety of projects in the region funded thanks to the oil largess," says Schneider of Parsons Brinckerhoff. He says that work in Dubai "is going crazy" with the major development of Palm Island. "We are seeing huge opportunities throughout the region, with new potential projects opening up on the Mediterranean side with possible peace initiatives between Israel and the neighboring Arab states a growing possibility," he says.

Chasing China

China continues to be a tempting target. "There are a lot of megaprojects in China in several markets," including 11 high-speed rail projects in preplanning stages, Laspa says. The farthest along will run from Beijing to Shanghai. "They also plan to build 20 nuclear plants over the next 30 years," he says. Right now, Beijing is assessing three separate technologies, Laspa says. He believes that the Chinese will eventually choose two of the technologies and build plants using both.

India could also soon begin to pay off on its potential. "The national government and the states are stabilizing and seem to be more welcoming to foreign investment," says PB’s Schneider. As a result, investors are more willing to take risks on new projects and privatized investments. "We are doing work on the Delhi Metro and on a privatized toll bridge in Calcutta," he says.

Many firms are finding opportunities abroad simply by bringing expertise in specific U.S. markets to foreign clients. "We’ve found institutional clients abroad looking at U.S. models and asking for the same," says Wedge of Shepley Bulfinch. The firm is using its experience in higher education and health care architecture to design two academic libraries in Ireland and a hospital in Brazil.

Some major design firms are finding new international markets almost by accident. "We opened an office in Mexico as a low-cost design center but that office began to find work locally," says Giorgio of CDI. The firm’s Mexican office is now teaming with a local contractor, Pycopsa, to take on design-build projects in that country. CDI’s sister company is providing aerospace engineering for European airplane manufacturer Airbus out of Hamburg, Germany. "We are finding some work in facilities design as a result of that preexisting relationship," he says.

For large design firms, the turnaround in the market is a relief after three years of softness. Most markets are seeing some growth and in some cases a lot of growth. But it remains to be seen whether a growing market means true prosperity, or whether firms will continue to push for size and volume at the expense of the bottom line. As PB’s Schneider points out: "It’s not gross sales that is really important. It’s client satisfaction and profitability that counts in the end."