Spotlight on Infrastructure Investment

College and university administrators routinely keep their eyes on the market for capital investment in infrastructure for higher education institutions. What is the current outlook on and expectations for trends on this front?

College and university administrators routinely keep their eyes on the market for capital investment in infrastructure for higher education institutions. What is the current outlook on and expectations for trends on this front? To find out, Spaces4Learning recently spoke with David Burstein, PE, director and senior consultant with PSMJ Resources, Inc., a publishing, executive education, and advisory company dedicated to serving architecture, engineering and construction (A/E/C) organizations worldwide. A long-time executive for a multinational engineering-construction company, Dave is an expert in project management for design and construction projects. Many of his and PSMJ’s clients and customers provide services to the higher education market. This, and the market research data that the firm collects, provide him with unique insight into the outlook for infrastructure investment on campuses. Here is what he told us.

Q. What is the outlook for building infrastructure investment in higher education?
Overall, despite some challenges, we expect it to continue growing. Every quarter, PSMJ surveys hundreds of architects and engineers about their proposal opportunities in 12 major markets, including education, and 58 submarkets, including higher education. From this data, in a report we call the Quarterly Market Forecast (QMF), we create a net plus/minus index (NPMI) that shows whether proposal opportunities are increasing or decreasing for each of category. The NPMI is the percentage of respondents who say that proposal activity is increasing minus the percentage who say it is decreasing. Since the end of 2010, this index shows a robust demand for these services, indicating that higher education owners are planning to continue expanding their building infrastructure. For example, in the third quarter of 2019, only 12 percent of the architecture and engineering firms that responded to the survey, and that work in higher ed, said that proposal activity in this market is falling. That’s compared with over 40 percent who said that proposal activity continues to increase. So the NPMI for higher ed in the third quarter is 28 percent, which is fairly solid historically. The remaining 48 percent said that proposal activity is about the same. And since proposal activity is running at historic highs, that’s not a bad thing either.

Q. Given how long the building boom has been in place, what is sustaining its continued strength?
There is a lot of competition among higher education institutions to get the best and brightest students, and building infrastructure is a major factor in attracting these students, as well as in college rankings such as the one done by U.S. News & World Report. Higher education experts theorize that colleges and universities are trapped in a competitive environment for students whose expectations of the physical environment are much higher than they once were. Schools that don’t keep up with these demands risk losing students and potentially triggering downward spirals in enrollment, money and prestige.

Q. What should colleges and universities be most focused on or aware of in fulfilling their capital infrastructure needs going forward?
Although design and construction activity remains strong, and appears to be on track to continue that way, we know that there is increasing push-back against the rapidly escalating cost of attending college. We’re also seeing a slowdown in enrollment growth—the Department of Education is projecting only a 3 percent increase from 2016 to 2027 after growth of nearly 20 percent from 2002 to 2016. And public schools are getting less funding from state and federal governments. So the challenges are mounting. What we’re hearing from our architecture, engineering, and construction clients is that colleges and universities are focusing more on ensuring that all capital infrastructure investments provide as much bang for the buck as possible. If they’re not already seeking the most cost-effective solutions in terms of innovative project delivery methods (e.g., design-build lean design/construction, public-private partnerships), energy efficiency, and sustainability, they should certainly start.

Featured

  • Quadient Achieves 25,000 Locker Installations Worldwide

    Global automation platform Quadient recently announced that it has acquired Package Concierge, a U.S.-based parcel management solutions provider, according to a news release. The acquisition pushes Quadient over the 25,000-unit milestone of global installations.

  • Illinois Elementary School Breaks Ground on Campus Expansion

    Heather Hill Elementary School, part of Flossmoor School District 161 in Palatine, Ill., recently broke ground on a new addition to the school focused on student support and security, according to a news release. The district partnered with Wold Architects & Engineers for the expansion as part of a longer-term facility planning and modernization initiative.

  • KnowBe4 Releases Report on Education Sector’s Preparedness for Cyberattacks

    Cybersecurity platform KnowBe4 recently released a new research report titled “From Primary Schools to Universities, The Global Education Sector is Unprepared for Escalating Cyber Attacks,” according to a news release.

  • College of the Desert Starts Construction on New Campus Location

    College of the Desert recently announced that it has broken ground on its new Palm Springs campus in Palm Springs, Calif., according to a news release. The multiple-building campus consists of 175,000 square feet of new construction and will cost an estimated $268 million.