This year’s rankings show a significant jump in revenue across the region for design firms, 130 of which reported just under $8.5 billion in revenue for 2022.

Design firms in the Southeast, which kept revenue steady through the COVID-19 outbreak, now appear to be breaking free from whatever tethers the pandemic still had on their operations, and, as firms look ahead, they see momentum picking up.

Markets Up Region-Wide

“The pandemic presented immense challenges, but it also provided an opportunity for many institutions to step back and strategically plan for the future,” says Jeffrey Brewer, CEO of Montgomery, Ala.-based Goodwyn Mills Cawood (GMC). “Many of these plans are becoming a reality and have transitioned into active design and construction projects.”

Passing the 500-employee and $100-million-in-revenue mark in 2022, GMC’s successful 2022 was due to a local feel and delivery of high-quality product, Brewer says, and a focus on its mission to “create opportunities for our people and the people we serve to build communities that thrive.”

He says leaders working to make communities more attractive are making significant investment in schools, health care, sports and recreation as well as commercial and mixed-use development. For GMC, the most active markets have been education, health care, sports, aviation and infrastructure, he says.

Firms this year reported more than $326 million in revenue in the education sector, $333 million in health care and more than $3.2 billion in transportation, compared with last year’s survey, which reported $319.5 million for education, $309 million in health care and $3.1 billion in transportation.

“In recent years, the energy transition has gained momentum due to a growing awareness of the urgent need to address climate change and reduce greenhouse gas emissions,” says Rich Mahaley, Burns & McDonnell’s vice president and general manager for the Florida region. “This has led to a renewed focus on clean energy technologies and policies to support their development.”

In a joint response, Mahaley and Oko Buckle, senior vice president and general manager for Burns & McDonnell’s Southeast region, add energy transition to the list of most active markets, including electric vehicle, solar, battery storage, substations and gas-fired power plants as well as water purification and treatment projects.

And work is speeding up across the board for Burns & McDonnell, Buckle says, including much work from the Infrastructure Investment and Jobs Act (IIJA), which he says is streamlining the permitting and approval for infrastructure projects that has in the past led to delays and cost overruns.

Bob Higgins, president and CEO of Nashville-based Barge Design Solutions, says the “unprecedented” funds from IIJA and the American Rescue Plan (ARPA), along with state investments in public infrastructure, are driving up the quantity and size of projects, solving infrastructure challenges that otherwise would persist. And those public investments have up to five-year implications for spending and project development, so Higgins doesn’t expect a slowdown.

Buckle and Mahaley say that on top of a booming population, especially in Southern metro areas, energy sector growth, military construction at various bases, a rise in electric vehicle and solar projects and recovery from natural disasters all combined to keep Southeast design firms busy in 2022.

“The firm is seeing strong growth from integrated engineer-procure-construct projects, the mission critical and oil and gas markets, the push toward decarbonization, logistics and supply chain alterations and the transformation to the digital world,” says Burns & McDonnell’s Buckle.

But there are still hurdles design firms have to overcome.

“Talent acquisition and retention is the single biggest inhibitor to growth, not interest rates,” says Brewer. “It doesn’t matter how many projects you win if you don’t have the right people to do the work and serve your clients.”

The labor shortage, a problem for several years already, was exacerbated in 2022 and is set to remain a challenge in the years ahead, Mahaley says, due in part to a retiring workforce set to take their decades of institutional knowledge with them and leave firms to work harder to keep up quality and efficiency.

Recruiting and retention are key areas of focus for Barge in 2023, after spending 2022 listening to its workforce and identifying critical success factors like a hybrid work environment, Higgins says. Looking to the years ahead, Barge is set to fully embrace the benefits of artificial intelligence and machine learning, which Higgins sees as changing the way the company works and potentially reducing risks in fieldwork.

And so far, 2023 is looking bright for Barge, which is winning work at twice the rate as expected, Higgins says, following a 2022 that saw the firm grow its revenues by 24%.

Survey Findings

Staying true to form, the most active Southeastern states are Florida, North Carolina and Georgia, in that order. Design revenue in those states increased over last year as well, especially in Florida, where revenue jumped from $3.05 billion to almost $3.5 billion.

In North Carolina, 2022 revenue for design firms participating in the survey totaled $1.89 billion compared to 2021’s $1.46 billion. And in Georgia, revenue rose but not as dramatically as in Florida and North Carolina, moving from $1.28 billion in 2021 revenue to $1.38 billion for 2022.

Firms reported $607 million in revenue in South Carolina, ranking fourth among Southeastern states, though that number represents a slight dip in activity and the only state with lower revenue in this year’s ranking, with last year’s survey respondents reporting slightly more than $608 million.

Tennessee reported $570 million, up from $512 million in 2021, and Alabama’s $466 million represents a significant increase over the 2021’s $341 million.

Puerto Rico, where activity dropped from $65.2 million to $43.7 million between 2020-2021, is up this year even over the numbers from two years ago, with firms reporting $74.5 million in revenue from projects there.

The Southeast Top Design Firms section ranks firms by revenue in the past year and includes information about those firms’ largest projects to start in 2022 and the most active sectors for those firms last year. The ranking is followed by breakout charts that list company revenue by state, project sectors and work disciplines. In addition, there is a profile of this year’s Southeast Design Firm of the Year, Moffatt & Nichol.