A Healthy Industry (OPINION)

While I am best known locally for my design/construction/development firm Mark Zweig Inc., our other business, Zweig Group, is the leading provider of business advice and information to the architecture, engineering and environmental consulting industries nationwide.

Now in our 27th year, we have worked with architectural/engineering and environmental firms large and small throughout this country and many other countries as well. While we work nationally, we have close relationships, both professional and personal, with a number of local architectural/engineering and environmental firms.

We have a pretty good cross-section of companies to draw from to form some opinions on what’s happening with this industry right here in Northwest Arkansas.

Overall, the majority of architectural/engineering and environmental firms in the Northwest Arkansas “metroplex” (Can I call it that?) are doing very well right now. Firms serving Wal-Mart Stores Inc. and related retailers are growing and hiring people, and taking what they have learned about multi-site development and rollout programs and applying it to other clients and markets.

The ability to handle rollouts, which are big building programs by national restaurants or retailers, is a particular strength of some firms in our region. Firms that do land-development-related engineering and surveying are also very busy — and turning away clients in some cases. They were decimated in the bad times and haven’t rehired to their peak levels yet in some cases and are being very cautious about overstaffing to handle a bubble in their workloads. 

Other design firms working on schools, religious facilities and government buildings have solid backlogs. The University of Arkansas provides a steady stream of small projects to some local firms. Unfortunately, however, the UA has a tendency to go to Boston, New York or elsewhere for most of its better design projects, with Marlon Blackwell’s recent addition to the Fay Jones School of Architecture being a notable exception — and my understanding was that the project was entirely privately funded so the donor controlled design firm selection.

Municipal water/wastewater and transportation-oriented engineering firms are doing pretty well here, also. Multifamily, quasi-student housing has been a strong market for a few of our local firms. All segments of our industry are healthy at this point in time, with a lot of hiring activity going on.

We have a very strong and diversified local economy in Northwest Arkansas. One has to consider, however, that most of our larger and more diversified companies don’t rely entirely on work that’s in our immediate area for their volume.

This can be both good and bad. A couple of our largest architectural and engineering firms have a significant amount of work (over a third of it) coming from the oil and energy sector — fracking, pumping and distribution — and the effect of declining oil prices on their businesses is a concern.

Any firm with too much work coming from one market sector or a single client should be concerned about what could happen to their business from changes not within their control. Developer-dependent companies should keep a close watch on their clients, or they’ll be negatively impacted like they were the last time around with a rapid fall-off in workload and lots of unpaid accounts receivable.

Architectural/engineering and environmental consulting firms that can export themselves beyond our immediate geographic bounds are less constrained in terms of growth opportunities than those who see themselves only as regional providers. But, in spite of the successes of some of our more noteworthy architects such as Marlon Blackwell, exporting services as a design firm based in Northwest Arkansas isn’t always easy.

Some people outside of our area are still prejudiced against us and cannot imagine that we have the design talent here that we have. 

Mark C. Zweig is the founder and CEO of Zweig Group, a three-time listed Inc. 500/5000 company, based in Fayetteville. Zweig Group is a consulting, publishing, media, education and events firm dedicated solely to helping owners and managers of A/E/C firms to be more successful. Zweig also owns Mark Zweig Inc. and teaches entrepreneurship at the Sam M. Walton College of Business at the University of Arkansas. He can be reached at [email protected].