Profits down, overhead up in 2006, survey shows
Other indicators confirm it was a challenging year
The ï¿½averageï¿½ ACEC Ohio member company saw its profits decline and its overhead jump last year, according to the results of the Councilï¿½s 2006 Financial Performance Survey.
Net profit, as a percent of net revenues, averaged 9.5 percent for the 45 companies that participated in the survey, a decrease of 2.5 percent compared to 2005. The median profit rate was 7 percent, one percent below the prior year.
The average overhead rate increased from 154 percent in 2005 to 159 percent last year. The median jumped even more, from 154 percent in 2005 to 164 last year.
Two other key measures of firm financial performance, chargeability and net revenue per employee, confirm that 2006 was a challenging year for the industry.
For the four-year period from 2002 through 2005, growth in net revenue per employee handily exceeded the inflation rate, jumping by nearly 10 percent in 2005 alone. But in 2006, net revenue per employee declined by about one percent, to an average of $99,119 per employee and a median of $98,906.
Chargeable rates, which held steady at 63 percent since 2003, dropped to 61 percent, average and median.
An important measure of future business conditions ï¿½ backlog ï¿½ suggests 2007 will be another trying year for the industry.
The average backlog of those firms responding to the survey was only seven months, while the median was an even more paltry six months. Both of those numbers are the lowest theyï¿½ve been since this yardstick was added to the survey eight years ago.
All ACEC Ohio member companies that participated in the survey have been mailed a copy of the final survey report. Non-participating companies can purchase the report for $150.