Architectural firms here say they're weathering the recession well—by making changes to be more versatile and competitive in a market where there is less design work to win.

Some firms accustomed to having plenty of work say there're more aggressive about seeking jobs, while others are adding capabilities to attract work they haven't landed in the past.

Some have made modest cutbacks in staffing in response to the slowdown, but most seem optimistic that the tide will change, and that for now, it's a matter of riding out the down cycle.

"The revenue stream is leaner than in years past," says Steven McNutt, managing principal at NAC/Architecture Inc., of Spokane. "The revenue stream is down in the range of 10 percent from what a quote-unquote normal year would be."

McNutt says he's seen more competitors bidding on projects than in the past. Firms from outside of the Spokane-Coeur d'Alene area, including from the West Side of Washington, have been more visible while trying to land jobs here.

NAC itself has been more aggressive in applying for projects, he says.

"The competition has increased and intensified," McNutt says.

Bernardo-Wills Architects PC, of Spokane, has expanded some in the past year, adding employees and a broader range of services, including interior design and landscape architecture, to position itself for the future, says principal Gary Bernardo.

"We want to be able to come out of this (recession) with the right team," Bernardo says. "I feel like when we do come out of this there will be some pent-up demand."

Craig Conrad, a principal at Madsen Mitchell Evenson & Conrad PLLC, of Spokane, says that firm, after running at capacity roughly for the past 18 months, is likely to slow to about 80 percent of capacity in the coming months. But that doesn't mean it plans staff cuts, he says.

The slowdown "allows us to position ourselves well for work to come, that we know is coming up," Conrad says. "It gives us a chance to take a little breather."

Earlier this year, architects and engineers contacted by the Journal said a steady flow in the pipeline of projects had slowed markedly, as the recession took its toll on private investment, and public entities delayed starting some work in case they could land federal stimulus funds for their projects. Retail and commercial projects were far off their usual pace, they said.

Today, architects and engineers here seem confident that the situation will improve, and say it's a matter of riding out the down cycle.

"The good news is there is work out there," says Conrad.

Madsen Mitchell Evenson & Conrad does most of its work on school projects, with those usually hovering at around 50 percent to 75 percent of its total volume, so it was good news when voters here approved Spokane Public Schools' $288 million bond in March, Conrad says.

"We hope to get some of that work," he says. "We compete well with firms that do education programs."

The firm has a staff of about 15 people, so a single major school project would make up a big piece of its workload, he says.

Among the negative impacts of the recession, Conrad says, has been the Legislature's cutbacks on state community college projects that would have been entering the design phase in the upcoming biennium.

"It would have been work we would have been competing for," he says.

He hopes some of the community college construction design work that was cut in the recent budget process will be picked up during the supplemental budget session next year.

At NAC/Architecture, school and medical projects make up about 75 percent of the firm's work, says McNutt.

Schools are dependent on voter approval of school bonds for capital projects, and those bonds haven't been passing as regularly as they once did, he says, adding that the firm is pursuing projects to be funded by one of the big bonds that did, for Spokane Public Schools.

On the medical side, McNutt says, "capital development has really almost ground to a halt." He adds, though, that "demand isn't going away; clients behind the scenes still have the needs."

Some private clients have put projects on hold, and the state also has changed plans on projects, he says.

"There're little pockets of people sort of frozen and waiting for better circumstances," McNutt says. "There are signs it's going to improve. We'll just have to ride it out until it does."

Bernardo-Wills has increased its focus on medical and dental offices as retail design work, which historically has been a big part of its volume, has slowed markedly, Bernardo says.

The firm, he says, is "very optimistic" about prospects later in 2009 and in 2010. He's hoping retail and shopping mall design work will return within that period, particularly work for supermarkets, Bernardo says.

"Retail is cyclical. It's reactionary to consumer confidence. But retailers have to grow, particularly publicly-traded ones," he says.

Revenues at Bernardo-Wills have been fairly consistent during the past three years, Bernardo says, adding that this year, there "has been a reallocation of where (revenue) is coming from."

Needed adjustments

Amidst the recession, Bernardo-Wills has been expanding a bit, adding a full line of interior design services, Bernardo says.

The firm has hired two interior designers within the last nine months, enabling it to provide any interior design and space planning services that project owners may need, he says.

"We should have done it 10 years ago," Bernardo says.

In the past, Bernardo-Wills has had to contract out for interior design work when doing projects such as medical and dental offices. Now, it handles that work itself, and also can pursue job opportunities involving just interior design work, he says.

Similarly, the firm also recently hired a landscape architect, eliminating the need to contract out for that service, Bernardo says.

Those new capabilities allow Bernardo-Wills to pursue more work in the tight economy, he says, adding, "It's also a better delivery of services, and more tightly integrated."

The hiring Bernardo-Wills has done isn't typical; some recent college graduates have found out hiring has changed.

Gregory Kessler, director of the school of architecture and construction management at Washington State University, says, "It's a little bit rough" for grads seeking jobs. "The firms just are not hiring."

Students are looking for architectural jobs, but opting for temporary work when they can find it. Others are working in non-architectural jobs, Kessler says.

"We had some really good students in December who graduated and are still looking" for jobs, he says.

Roughly two dozen WSU students graduated with master's degrees in architecture in December, but just 60 percent to 70 percent of them have found employment, Kessler says.

Says Bernardo, "It might be that way for a couple of years if you're just coming out of school."

When the economic news improves, there will be more design work, he says, adding that the work returned after earlier recessions.

Conrad, says, "College grads are going to have a bright future. There's going to be a lot of work."

A great deal of it will be designing and building energy-efficient structures, and making buildings more energy efficient, he says.

"There's an economic need to be more conservation conscious," Conrad says.

Outlook

Until the market turns around, "Some (firms) right now are treading water, others are doing better, and altogether we're keeping our heads above water," McNutt says.

NAC/Architecture's Spokane office isn't doing as well as in the past, and isn't doing as well as the firm's Seattle office, he says.

"Spokane has had its peaks and valleys, but it's had more modest peaks and valleys," McNutt says. "We're in a little bit of a dip right now. But there's nothing terrible on the low side."

He's optimistic that projects will emerge, whether in health care or in education.

"It's not a question of whether they'll (clients will) address those needs, it's a question of when," McNutt says. Retail and commercial should return, too, he says.

One of the most obvious economic impacts of the recession has been that pricing on construction projects has been very competitive, and as a result, project bids have come in lower than estimates.

"It can be said that construction is on sale," Bernardo says.

That, says Conrad, has impacts on architects.

"That means we have to make sure we have very, very good construction documents," he says. The dependence by general contractors on details and accurate construction documents in such a competitive bidding environment "doesn't leave us any room for error."

The low price of work also might stimulate activity.

"It's possible for owners to get a lot of value for the work," Conrad says. "Now is a really good time to be building projects. They can get more work for a lower cost than they did a year ago."

Conrad adds, "Once things get going again, there will be a lot of catch-up work to do. There's a lot of infrastructure that's going to need work."