Embracing Growth and Resilience: Insights for AEC Firms in Stillwater, Oklahoma
The architecture, engineering, and construction (AEC) industry is experiencing robust growth and showing remarkable resilience, even amid economic uncertainties. The latest 2025 Valuation Report by Zweig Group highlights industry-wide trends in firm valuation, financial performance, and market drivers. This report provides valuable insights that AEC firms can leverage to enhance their operations and thrive in a competitive marketplace. In this article, we explore key findings from the report and discuss how AEC firms in Stillwater, Oklahoma, can apply these insights to drive growth, improve firm value, and remain competitive both locally and beyond.
Industry Growth and Firm Valuation
The 2025 Valuation Report reveals a notable upward trend in AEC firm values, indicating that many companies have increased in worth over the past year. By the numbers, the median AEC firm surveyed in 2025 is larger and more profitable than before, reflecting the industry’s overall expansion. Key metrics for the median firm include:
Table: Key metrics from Zweig Group’s 2025 Valuation Report showing the profile of a median AEC firm.
These figures are higher compared to the previous year’s survey, demonstrating growth in both human capital and overall firm value. For instance, revenue and profit indicators have improved, and the value per employee has risen steadily, emphasizing the increasing worth of talented staff in AEC firms. Valuation multiples remain strong as well, with the value/EBITDA metric inching up from 4.23 to 4.28 and the value/NSR ratio holding steady around 0.63. This stability suggests a long-term consistency in how revenue translates to firm value, even as firms scale up. For AEC firms in Stillwater, these industry benchmarks underscore the importance of maintaining strong financial metrics and investing in growth to keep pace with national trends.
Key Drivers of Valuation
Several core factors are driving the high valuations observed in the AEC industry. According to the report, hard backlog remains a key valuation driver, reinforcing the importance of having solid contracted future work on the books. Firms with a healthy backlog (i.e., signed projects in the pipeline) tend to command higher values, as backlog provides visibility into future earnings. This highlights the need for effective contract management, cash flow management, and project execution strategies – all of which help convert backlog into profitable revenue.
In addition, revenue growth and profitability are intrinsically linked to firm value. The stability of the value-to-NSR ratio (~0.63) over the past decade shows that as firms grow their net service revenue, their valuations generally rise in step. Steady or improving profit margins (e.g., as reflected in EBITDA multiples) give investors and owners confidence, thereby boosting the firm's worth. For Stillwater’s AEC firms, focusing on growing revenue streams while safeguarding profit margins will directly enhance their valuation. It’s also worth noting that external market factors are influencing valuations: increased scrutiny from outside investors has put focus on things like revenue recognition, contract profitability, and risk management during acquisitions and mergers. Owners in Oklahoma are wise to evaluate their internal valuation methods against these market expectations, ensuring their firm’s worth is benchmarked realistically against industry standards.
Challenges and Opportunities
Despite the positive trends, AEC firms face a mix of challenges that could temper growth, as well as opportunities that can fuel further success. Stillwater-based firms should be mindful of these industry dynamics and adapt accordingly.
Challenges:
Rising material costs and labor shortages – Inflation in construction materials and a shortage of skilled workforce are putting pressure on project budgets and schedules. Higher costs and difficulty in hiring/retaining talent can squeeze profit margins for local builders and designers.
Tighter lending conditions – With higher interest rates and cautious lenders, obtaining financing for projects or business expansion has become more difficult. This means AEC firms might face more hurdles in funding growth initiatives or clients may delay projects due to financing issues.
Competition and market shifts – The strong industry performance is attracting new entrants and outside investors, which increases competition. Firms may feel pressure to differentiate themselves and continuously prove value in a crowded market.
Opportunities:
Infrastructure and public sector investment – Strong demand for infrastructure projects is driving growth in valuations. Government-funded initiatives (roads, bridges, utilities, public buildings) are creating a robust pipeline of work. In Oklahoma and nationwide, public sector investments from recent funding legislation mean more projects are available for bid. Stillwater firms can capitalize on local infrastructure improvements and municipal projects that need AEC services.
Energy and tech sector expansion – The expansion of energy infrastructure is identified as a key growth catalyst in the AEC industry. This includes work on power plants, grid upgrades, pipelines, and renewable energy facilities. Additionally, technological growth in the region is boosting construction demand. For example, Google’s decision to build a new data center campus in Stillwater is a testament to the area’s economic strength and will create construction and engineering opportunities locally. Such projects, often focused on advanced technology and AI, require extensive AEC involvement – from site development and utilities to building design and construction – offering local firms a chance to participate in cutting-edge developments.
Mergers and acquisitions – The high valuation environment has led to increased M&A activity in the AEC sector. For firm owners, this opens possibilities to merge with or sell to larger entities at attractive prices. It also means growth-oriented firms can acquire smaller specialists to broaden their capabilities. Stillwater companies might find opportunity in strategic partnerships or acquisitions, either by joining forces with firms that complement their services or by becoming attractive acquisition targets themselves if they have strong fundamentals.
By recognizing these challenges and opportunities, AEC firms in Stillwater can plan strategically, mitigating risks (e.g., through cost control and talent development) while aggressively pursuing the new business opportunities presented by the market.
Strategies for Success
To thrive in this evolving landscape, AEC firms should adopt proactive strategies that bolster resilience and capitalize on growth areas. Here are several best practices and approaches for Stillwater’s AEC firms, drawn from industry insights and local examples:
Tighten Financial Discipline – Maintain a close watch on financial health. In response to economic pressures, firms are tightening financial controls to safeguard profitability. This includes prudent budgeting, controlling overhead costs, and carefully vetting project financials to ensure each job is contributing to the bottom line. Strong fiscal management will help weather high material costs and interest rates.
Leverage Automation and Innovation – Embrace new technologies to improve efficiency. Many AEC firms are leveraging automation in design and construction processes, using tools like BIM (Building Information Modeling), project management software, and even AI-driven design assistants. Automation can help offset labor shortages by boosting productivity and can reduce errors and rework, thereby saving money. Stillwater firms that invest in modern technology and continuous improvement can gain a competitive edge and deliver projects more efficiently.
Adopt Alternative Delivery Methods – Consider project delivery models beyond the traditional design-bid-build. The industry trend toward alternative project delivery methods (such as design-build, integrated project delivery, or public-private partnerships) can offer more control over timelines and costs. These methods encourage closer collaboration among architects, engineers, and contractors from the outset, which can lead to innovative solutions and faster project completion – a selling point for clients looking for value.
Build and Manage Backlog – Treat your project backlog as a strategic asset. As noted, a solid backlog of signed work is a key driver of firm value. AEC firms should strive to keep a healthy backlog by actively pursuing new contracts and renewing existing client engagements. Equally important is executing projects effectively to convert backlog into revenue on schedule. Satisfied clients and successfully delivered projects often lead to repeat business and referrals, further feeding the backlog.
Stay Client-Centric – In a competitive market, a client-centric approach can set you apart. Understanding and delivering on client needs builds loyalty and a strong reputation. For instance, Integrated Architecture (now part of Schemmer) attributed its success to “listening to their clients and designing for their needs,” according to Schemmer’s CEO. Stillwater firms should maintain close client relationships, communicate proactively, and tailor their services to solve clients’ specific challenges. Happy clients not only come back with more work but also become advocates for your firm.
Pursue Strategic Partnerships – Explore partnerships, joint ventures, or mergers that can strengthen your firm’s market position. Collaborations can provide access to new client networks, additional expertise, and larger project opportunities. A prime example is Integrated Architecture’s merger with Schemmer, which transformed a small 6-person local firm into part of a 140+ person full-service AEC company, greatly expanding its capabilities and reach. Such strategic moves toward diversification have enabled firms to offer a more comprehensive suite of services and compete for bigger projects. Similarly, smaller engineering consultancies in Stillwater might partner with larger firms on complex projects (like highway expansions or industrial facilities), gaining experience and credibility.
By implementing these strategies – financial vigilance, innovation, flexible delivery models, strong backlog management, client focus, and smart partnerships – AEC firms in Stillwater can enhance their resilience and set the stage for sustained growth.
Local Success Stories
Stillwater, Oklahoma is home to several AEC firms that exemplify growth and resilience through savvy business practices. Learning from local success stories can provide inspiration and practical lessons for other firms in the region.
Gose & Associates – A homegrown consulting engineering firm, Gose & Associates has been operating in Stillwater since 1983 and has over 30 years of experience in the industry. The firm provides a wide range of services, including civil engineering design, site planning, infrastructure development, and project management for land development and construction projects. Gose & Associates’ longevity and solid reputation were built on finding practical solutions to client needs and delivering projects successfully in the community. Their sustained success highlights the value of deep local expertise, consistent quality, and adapting services to market demands. By evolving with the city’s growth – from campus expansions to municipal improvements – they remain a trusted name in Stillwater’s AEC sector.
Integrated Architecture (now part of Schemmer) – Integrated Architecture started as a boutique architecture firm with offices in Stillwater and Edmond. In February 2022, it took a strategic leap by joining Schemmer, a larger multidisciplinary AEC firm. This acquisition expanded Integrated’s six-person team into a 140+ person full-service architectural and engineering firm. As a result, the merged entity can offer comprehensive services ranging from architecture to civil, structural, mechanical, and electrical engineering, all under one roof. For the local team, this partnership meant access to far greater resources, a broader client base, and the ability to bid on larger and more complex projects than before. The merger illustrates how strategic partnerships and diversification can accelerate growth: Integrated Architecture leveraged Schemmer’s scale while Schemmer gained the benefit of Integrated’s local relationships and talent. Today, Schemmer’s presence in Stillwater (strengthened by the Integrated team) stands as a testament to collaborative growth, showing that local firms can successfully integrate with regional/national players to mutual benefit.
These examples highlight that there is no single path to success, whether it’s steady organic growth over decades rooted in the community (like Gose & Associates) or joining forces with a bigger firm to expand capabilities (like Integrated Architecture did). The common thread is a forward-looking strategy and a commitment to delivering value, which have allowed these firms to thrive in the Stillwater market. By studying what these companies did right, such as maintaining quality, building client trust, and seizing opportunities to broaden their services, other AEC firms can glean ideas for their own growth trajectories.
Conclusion
The insights from the Zweig Group 2025 Valuation Report offer an encouraging outlook for AEC firms, painting a picture of an industry that is financially stronger and full of opportunity. For AEC firms in Stillwater, Oklahoma, the takeaway is clear: focusing on financial health, strategic management, and leveraging emerging opportunities will position your firm for long-term success. By addressing current challenges head-on (through cost control, talent development, and innovation) and by embracing growth catalysts (like infrastructure projects and partnerships), local firms can continue to prosper even amid broader economic fluctuations.
In essence, growth and resilience go hand in hand – firms that invest in robust practices and remain adaptable are better equipped to weather challenges and capitalize on the rising tide of industry demand. As the region welcomes new developments (such as tech investments and infrastructure upgrades), Stillwater’s AEC community stands to benefit by staying informed, agile, and client-focused in their approach.
To further explore the data behind these insights and benchmark your firm against industry peers, consider reviewing the full 2025 Valuation Report by Zweig Group. Knowledge is a powerful tool – staying up-to-date with industry trends and reports can help your firm make informed strategic decisions. In addition, engage with local industry groups (like the Stillwater Chamber of Commerce or AEC professional associations) and resources such as The Zweig Letter for continuous learning. By doing so, AEC firms in Stillwater can not only stay competitive but also drive the next chapter of growth in our community. Here’s to building a resilient and prosperous future for your AEC firm in Stillwater!
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References
[1] Zweig Group Releases 2025 Valuation Report of AEC Firms, Highlighting
[2] TZL 1577 (web) - online.flippingbook.com
[3] Google purchases land to build data center in Stillwater
[4] Schemmer Acquires Integrated Architecture | AEC | Omaha | Oklahoma
[5] Gose & Associates Employee Directory, Headcount & Staff | LeadIQ