Canadian Consulting Engineer

Profits dip among U.S. consulting firms in 2008

Newly released data from ZweigWhite, management consultants for the construction sector in the U.S., paints a glum ...

August 1, 2008   Canadian Consulting Engineer

Newly released data from ZweigWhite, management consultants for the construction sector in the U.S., paints a glum picture for consulting firms south of the border, suggesting that the peak of the business boom is now over.
The ZweigWhite 2008 financial performance survey indicates that U.S. firms’ median pre-tax, pre-bonus profit margins fell from 14.0% last year to 11.1% this year.
The downward turn ends a period of three years when increased profits were the name of the game.
Earnings before interest, taxes, depreciation and amortization expenses as a percentage of net revenues have also dropped in 2008 from an all-time high last year — from 15.9% to 13.5%.
Ian Rusk, head of ZweigWhite’s advisory services division, said: “This confirms what we’ve been hearing from our clients and industry trade associations. More firms are starting to be impacted by the economic slowdown, not just those focused on residential development.”
Firms’ utilization rate — the percentage of staff labour charged to projects — fell to a nine-year low — a median of 59.8%.
The 2008 Financial Performance Survey of Architecture, Engineering, Planning & Environmental Consulting Firms, is available from www.zweigwhite.com.


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