A recent report from FMI Consulting forecasts continued growth of design-build over the next three years, despite recent industry challenges and market volatility. FMI’s findings indicate that design-build is anticipated to account for 47% of construction spending and a 22.5% growth in total design-build spending by 2026.
“With the positive projections reported by FMI in this update, design-build will be integral to keeping our nation’s infrastructure projects moving forward,” said Lisa Washington, CAE, Design-Build Institute of America (DBIA) executive director/CEO.
The new survey reexamined the industry following the challenges of the past three years, including the COVID-19 pandemic, labor shortages, and supply chain issues.
“Over the last three years, we’ve seen design-build withstand the uncertainty of a volatile market and continue to demonstrate optimal results," Washington said. "It is a delivery method that performs, even in the face of adversity. In fact, during times of crisis, the flexibility of design-build has helped communities recover more quickly and cost-effectively by delivering projects on time and on budget.”
FMI found that design-build continues to see usage in all sectors and regions of the U.S., and the industry has witnessed project outcomes and innovation across all sectors. The FMI Design-Build Market research report provides detailed geographic and sector data, including market analysis and projections. Here are a few highlights:
- Overall, design-build is anticipated to represent up to 47% of construction spending in the assessed segments and geographies in 2026.
- Total growth in design-build construction spending is anticipated to be 22.5% from 2022 to 2026. Design-build is anticipated to account for $1.9 trillion of construction spending in the assessed segments over the 2022 – 2026 forecast period.
- The majority of respondents (83%) indicated design-build can help them with supply chain issues over other delivery methods.
- Highway/street (18%), educational (13%), and manufacturing (14%) are anticipated to hold the greatest share of design-build spending through 2026.
- Together, the transportation and highway/street sectors are expected to represent 27% of design-build spending by 2026. These sectors include aviation, marine, land, and street projects.
- Water/Wastewater was the smallest segment of spending but the fastest growing – combined annual growth remains the highest.
- Over three-quarters of survey respondents believe that design-build facilitates greater utilization of prefabrication on projects.
- Competitive Best Value (CBV), Progressive Design-Build (PDB), and Qualifications-Based Selection (QBS) account for a majority of the procurement approaches. Respondents indicated CBV, PDB, and QBS were better able to manage cost uncertainty in a volatile market environment than Low Bid. PDB was at the top with the majority of respondents indicating it is either moderately (31%), very (37%), or extremely (15%) well-suited to managing cost uncertainty.