The combined operating revenue for architectural services and landscape architectural services saw its slowest annual increase in five years in 2019.

Statistics Canada reports that the companies’ combined operating income rose by 1.9 percent to $5.3 billion in 2019.

The agency reports that while demand for housing remains at or near historic highs, it pulled back in 2019 because of lower demand for single-family homes. Too, investments in business non-residential and public infrastructure grew at a more subdued pace in 2019. Total operating expenses for those industries increased at a faster rate (3.0 percent) than total operating revenue. As a result, operating profit margins for design firms dropped from 19.3 percent in 2018 to 18.5 percent in 2019.

Architectural services revenue continues to be more heavily weighted in the non-residential sector than in the housing sector. Projects such as office buildings, educational institutions, health care institutions, and retail stores and restaurants accounted for 56.4 percent of the combined sales in the two industries in 2019. Residential building projects meanwhile accounted for 18.3 percent of the sales, while the remaining sales for the two industries (25.1 percent) were generated by landscape architectural services, urban planning and other related services.

Industry sales to businesses represented 53.4 percent of total sales, followed by sales to governments, non-profit organizations and public institutions (32.1 percent); individuals and households (11.2 percent); and customers outside of Canada (3.3 percent).

When considering the impact of the COVID-19 pandemic on 2020 revenues, Statistics Canada suggests that fortunes may be mixed. Those companies providing service in the non-residential construction market may been hit hard by declining investment while those firms in the residential sector may prosper. This is particularly in light of the fact that housing starts rose by 4.4 percent last year.