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Consulting and publishing firm PSMJ Resources' recent Quarterly Market Forecast (QMF) shows architecture, engineering, and environmental (A/E) firms are on an extended growth trend in the third quarter of 2018.

The report found a net difference of 40.2% between firms seeing an increase in proposal activity in the third quarter compared with those seeing a decrease. A total of 52.9% of the respondents reported increased overall proposal activity in the quarter, while 12.7% saw a decrease. The remainder, 34.4%, said activity was about the same.

The last time the index ended the year in the negative was 2008. Activity in the first quarter of 2018 was near record levels for the QMF at 66%, but leveled off to 33% in the second quarter. The second and third quarter results are consistent with the past five years of annual indexes, which ranged from 28%-39%

PSMJ computes the Net Plus/Minus Index (NPMI) by subtracting the percentage of participants who responded negatively from the percentage who responded positively. The company uses proposal activity to gauge long-term outlook because it is the earliest leading indicator in the life-cycle of the design and construction process. The survey typically receives 150 to 300 from responses from subscriber A/E firms each quarter, with 213 participating in the third-quarter survey.

“Since 1960, our average time between recessions is 73.5 months,” says PSMJ Principal David Burstein, P.E. “We are now at over 100 months. But our market research indicates that the overall A/E market is still strong and staying solid. That makes me sanguine about the next year or two.”

Among the 12 major markets assessed in the survey, energy/utilities (66%), water/wastewater (62%), environmental (55%), housing (54%) and commercial users (49%) scored the highest. In the second quarter, water/wastewater (62%), housing (59%), heavy industry (52%), education (49%) and energy/utilities (46%) showed the strongest results. The weakest third-quarter result was for education, which slumped to 33%.