Western design firms are shedding last year’s holding pattern as backlogged projects are finally being let go.
High interest rates previously kept plans grounded, but regional pipelines are now active, boosting revenue in California, the Pacific Northwest and Hawaii. The main obstacle has shifted from locating clients to finding enough workers to do the work.
While regional demand remains stable, local growth is dictated by unique environmental and regulatory pressures. “Overall, the region is stable, and we’re seeing activity in each of these states,” says Sarah McIlroy, regional leader for the US West at Stantec.
In Washington and Oregon, business is picking up, he says, because new government regulations are forcing cities to clean up their water systems and filter out toxic “chemicals forever” (PFAS). For example, Stantec is designing the largest PFAS treatment facility in the Northwest for Vancouver, Wash.
WSP served as design engineer for the 125-mile Ten West Link transmission project, which connects power grids and brings renewable energy to Arizona and California.
Photo courtesy WSP
Further south, droughts and water shortages are forcing companies to focus on different types of projects. “In California and Arizona, our water group works on water reuse projects, an ongoing effort in many western states in light of climate change and water supply issues,” says McIlroy.
Water is not the only sector on the rise. While traditional commercial office work is flat, the technology, public infrastructure and energy sectors are booming.
“Power and energy are the clear growth drivers right now, beating plan and driving a significant portion of our revenue,” says John Fisher, WSP’s regional executive in California. “Demand tied to electrification, ports and data centers is reshaping the opportunity set.” WSP’s current portfolio reflects this, from the 125-mile Ten West Link transmission project to fleet electrification with LA Metro.
While specialty sectors are seeing an influx of early capital projects, public infrastructure and K-12 education are shifting toward asset management.
“Owners are asking more about asset optimization because of rising lifecycle costs,” Fisher notes. “Many of the current projects focus on modernizing existing systems for resilience and capacity, particularly in transport and water.”
Public schools follow the same trend. With apartment enrollment and aging buildings, districts are opting for major renovations instead of new construction.
“We’re not seeing a pivot to new construction and development,” says Aaron Jobson, president and CEO of Quattrocchi Kwok Architects (QKA). “Much of our work focuses on multi-phase projects that modernize or replace existing facilities on a campus.” QKA is currently implementing this model in California through campus upgrades at Sunnyvale Middle School and Mill Valley’s historic Tamalpais High School.
In contrast, specialized sectors of higher education and health sciences are building foundations to adapt to modern technology.
“Construction on the ground represents more than 90% of our revenue by 2026,” says Jenna Knudsen, principal of CO Architects. “However, many of these projects involve additions to existing medical or laboratory facilities and also involve renovations.”
CO Architects is designing the redevelopment of the Providence Rancho Mission Viejo campus, anchoring the California site with a new 177,000-square-foot hospital tower.
Water Station 4 in Vancouver, Washington, is one of the first stations in the city that will treat water for PFAS.
Courtesy of Stantec
Capacity bottleneck management
The obstacle for all these projects is the shortage of senior engineers and architects. “Capacity remains a real constraint, especially in high-cost markets like California,” says Fisher.
Companies are managing this talent bottleneck through different operational strategies. QKA is expanding geographically. “We’ve been selective about which projects we take on … and turned down attractive projects to try to maintain that balance,” Jobson says. To counter this, QKA opened a new Colorado branch to capture out-of-state talent pools and ease the strain on its California staff.
