Blueprint for Success: Navigating the Design-Build Market

Sizing the Design-Build Market

Overall, FMI predicts that the design-build market will continue to grow as a share of overall US construction put in place each year. They anticipate national spending will exceed $500 billion per year with a steady Compound Annual Growth Rate (CAGR) of 2.9%. Here in the “South Atlantic” region, encompassing states along the Atlantic Seaboard from Maryland to Florida, the report predicts that design-build market will grow to $112 billion by 2028 with a 2% CAGR.

This growth isn’t spread evenly across all vertical markets. While large sectors like Manufacturing (totaling $100 billion) are experiencing a decline of -1.8% CAGR, Educational projects (amounting to $68 billion) are showing promising growth at a rate of 4.1% CAGR. Commercial projects, valued at $65 billion, are following a steady growth path with a CAGR of 2.1%.

Other major growth markets include Highway and Street ($87B, 4.8% CAGR), Transportation ($41B, 6.1% CAGR) and Water/Wastewater ($41B, 7.8%)

Why Owners Select Design-Build

FMI writes that “design-build is rapidly becoming a preferred project delivery method across various project types and sizes.” They attribute this growth in the design-build market to several factors:

• “Moving away from adversarial attitudes fosters trust and efficiency, while early contractor involvement mitigates risks and accelerates timelines.”
• “Design-build is most advantageous for projects with high complexity or critical schedules”
• “It streamlines communication and accountability by integrating the design and construction teams early, allowing for better handling of complex coordination, risk management, and decision-making.

One respondent summed up how design-build helps them manage risk:

“In traditional Design/Bid/Build, you aren’t sure of the project cost until it is done. These days especially, you’re going to be over budget most likely. The cost of disputes and litigation on more traditional delivery methods is higher in general. With more use of progressive design – build, you can have some of the cost certainty early in the project and fewer disputes, which results in overall lower costs.”

Design-build is growing nationwide, with owners pointing to several reasons why it helps them reduce risk, lower costs, and speed up schedules. However, they also identified several barriers to implementing design-build in their area, which we will cover in our next blog post.