...but it seems to be a start-stop-start pattern,” says Erickson. He says the financial woes in Europe may bleed over to the American lending markets and stifle project financing.
Demographics may play a role in the increased need for CM services. “In the short term, the market for agency CM is bad, but in the long term, it is really good,” says Peck. He says the retirement of the baby-boom generation will cause a significant “brain drain” on an owner’s capacity to manage complex projects in-house. This factor is going to open the market for sophisticated CM firms.
“These owners are not going to be looking for bodies who will just do as they are told. They will want experience and leadership for their projects—people who are willing to save the project despite client demands, if necessary,” Peck says.
The budget shortfalls in state and local governments have caused many firms to explore where they can contribute in the public-private partnership arena. “P3s are beginning to gain traction,” says Erickson of Harris & Associates. He says Harris is determined to find ways to help public clients take advantage of the trend. Adds D’Agostino, “The ability to find cash for building infrastructure has to be part of any large CM firm’s array of services.”
On the other hand, Richter says the P3 potential for CM firms may be overrated. “It is the next bandwagon, but few firms are actually in that market. The P3 market is primarily in the hands of a few large contractors,” he says.
The international market continues to be fertile ground for CM firms trying to shore up a soft domestic market. Hill International has been one of the biggest players in the international CM market, and it continues to expand. “We are doing a lot of working in North Africa, particularly in Egypt and Libya,” says Richter. Hill is working on the $2-billion expansion of Al Fateh University in Tripoli, Libya, and is program manager on the $540-million Grand Egyptian Museum in Giza, Egypt.
Now Hill is turning its sights on Asia and Latin America. Richter says the firm already has established relationships in India and China. In Latin America, Brazil has huge potential, Richter says. “It has tremendous natural resources and will host the 2016 Olympics,” he adds.
One major PM firm is branching out into new field: Broaddus Associates developed its own web-based project-management software. “We tried off-the-shelf programs but eventually hired a programmer to develop our own software,” says Broaddus. Its “Owner In-Site” program has worked so well in-house that the firm has decided to market it commercially. “We will be rolling it out in a few months,” he says.
For professional services firms, the current market continues to look slow, but most are optimistic about the future. “The needs continue to be there. It is just about the money now,” says Erickson. But, he cautions, professional services firms have to stand up and be counted. “We are the watchers of the public infrastructure and we have to make sure our voices are heard when funding issues are being debated,” Erickson says.