FMI Consulting Report Projects Continued Design-Build Growth

A 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.

Building on FMI’s 2021 report on design-build utilization, the survey reexamined the industry following the challenges of the past three years, including the COVID-19 pandemic, labor shortages and supply chain issues. The flexibility and collaboration inherent in design-build uniquely position the project delivery method to resist stagnation, and respondents overwhelmingly indicated that design-build project delivery – regardless of procurement approach – is better able to manage cost uncertainty. The projected decrease in design-bid-build alongside the growth in design-build demonstrates the industry is moving toward collaboration as a norm and an expectation.

FMI found that design-build continues to see usage in all sectors and regions of the United States, and the industry has witnessed extraordinary 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. The following 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 2022-26. Design-build is anticipated to account for $1.9 trillion of construction spending in the assessed segments over the 2022-26 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.
• Water/Wastewater was the smallest segment of spending but 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, progressive design-build and qualifications-based selection 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.