Hourly billing rates increase modestly

Billing rates among architecture and engineering firms increased only slightly during the last year, a new report shows. According to ZweigWhite’s 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 last year, and 19.7 percent since 2004, which equates to a compounded annual growth rate of 4.6 percent during 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 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.

Other findings from the survey show 77 percent of firms update their billing rates annually, while another 13 percent do so every two years. Additional survey data show current project design fees as related to construction costs for a range of architecture and engineering services in a series of major market sectors.

The 2008 Fee & Billing Survey of Architecture, Engineering, Planning & Environmental Consulting Firms is available for $445, plus $8 shipping and handling. To order, contact Zweig White Information Services, One Apple Hill Drive, Suite 2, Natick, MA 01760; 508-651-1559; fax 508-653-6522; e-mail info@zweiggroup.com; or online at www.zweigwhite.com.