Hourly billing rates in A/E firms increase modestly

Billing rates among architecture and engineering firms increased only slightly over the past year, a new report shows. According to ZweigWhite’s newly released 2008 Fee & Billing Survey of Architecture, Engineering, Planning & Environmental Consulting Firms, billing rates across the 29 employee positions reviewed for the report rose an average of 1.5 percent in the past year, and 19.7 percent since 2004, which equates to a compounded annual growth rate of 4.6 percent over the five-year period.

“Over the same five-year period, inflation rates in the U.S. have averaged about 2.8 percent, so at face value it would seem that architecture, engineering, and environmental firm fees have experienced real growth of about 2 percent a year,” says Ian Rusk, ASA, financial consultant to the industry and head of ZweigWhite’s advisory services division. “But inflation has been rising while billing rate increases have been falling. Since November of 2007, the U.S. inflation rate (as measured by the consumer price index) has been hovering at approximately 4 percent, so a billing rate increase of only 2 percent means we’re swimming against the tide, and the tide is winning.”

According to the survey, as a group this past year, civil, structural, mechanical, electrical, and process engineers’ billing rates fell an average of 2.2 percent, while rates among firms’ top management (project managers, department heads, associates, senior associates, and principals) increased an average of 4.3 percent.