L6722 GL

CONTENTS
Error! No text of specif ied sty le in document.
March 2016
IBISWorld Industry Report
Global Engineering Services

March 2016
About This Industry..................................... 2

Industry Definition ......................................... 2
Main Activities ............................................... 2
Similar Industries .......................................... 2
Additional Resources ................................... 3
Industry Performance ................................. 4

Executive Summary ..................................... 4
Key External Drivers ..................................... 4
Current Performance .................................... 5
Industry Outlook ............................................ 8
Industry Life Cycle ........................................ 10
Products & Markets ..................................... 11

Supply Chain................................................. 11
Products & Services ..................................... 12
Demand Determinants ................................. 14
Major Markets ............................................... 14
International Trade........................................ 15
Business Locations....................................... 17
Competitive Landscape ............................. 19
Market Share Concentration ......................... 19

Key Success Factors .................................... 19
Cost Structure Benchmarks.......................... 20
Basis of Competition ..................................... 22
Barriers to Entry ............................................ 23
Industry Globalization .................................... 24
Major Companies ......................................... 25

Other Players ................................................ 25
Operating Conditions .................................. 29

Capital Intensity ............................................. 29
Technology & Systems ................................. 29
Revenue Volatility .......................................... 30
Regulation & Policy ....................................... 30
Industry Assistance ....................................... 31
Key Statistics ................................................. 32

Industry Data ................................................. 32
Annual Change.............................................. 33
Key Ratios ..................................................... 33
Jargon ............................................................ 34
www.ibisworld.com | www.ibisworld.com.au | www.ibisworld.co.uk | www.ibisworld.com.cn
WWW.IBISWORLD.COM
March 2016
About This Industry

Industry Definition
Establishments in this industry apply physical laws and principles of engineering in the design,
development and use of machines, materials, instruments, structures, processes and systems. The
assignments may involve the provision of advice, preparation of feasibility studies, preparation of
preliminary and final plans and designs, the provision of technical services on construction and project
evaluation. Operators may also provide inspection and evaluation services.
Main Activities
The primary activities of this industry are:
Feasibility studies, including environmental impact assessment and community consultation
Process management (e.g. assessing engineering and product problems)
Project planning and economic assessments
Providing construction management services
Providing design and management services for construction and engineering infrastructure projects
Providing design and management services for environmental projects
Providing design and management services for industrial processes and equipment
Providing quality management assessment and accreditation services
The major products and services in this industry are:
Energy and power
Transportation
Building construction
Water, sewer and waste
Industrial and manufacturing
Other services
Similar Industries
E3512-GL - Global Non-residential Building Construction
Establishments in this industry construct commercial, industrial or institutional buildings, or engage in the
management of nonresidential building projects.
E3711-GL - Global Infrastructure and Non-building Construction
Establishments in this industry construct infrastructure such as highways, oil pipelines and other
structures, or engage in the management of nonbuilding construction projects.
L6721-GL - Global Architectural Services
Establishments in this industry provide architectural services involving the design of buildings and
structures.
L6723-GL - Global Graphic Designers
Establishments in this industry create and develop designs and specifications that optimize the use, value
and appearance of products.
WWW.IBISWORLD.COM
Additional Resources
For additional information on this industry:
www.fidic.org
International Federation of Consulting Engineers
www.efcanet.org
European Federation of Engineering Consultancy Associations
www.aea.org
American Engineering Association
www.ajce.or.jp
Association of Japanese Consulting Engineers
www.consultaustralia.com.au
Consult Australia
www.engc.org.uk
Engineering Council of the United Kingdom
March 2016
WWW.IBISWORLD.COM
March 2016
Industry Performance
Executive Summary
The Global Engineering Services industry provides surveys, feasibility and technical studies, geotechnical
investigation and environmental impact studies for transportation, building, energy, industrial, mining
and water and sewage industries. Typical industry projects involve the design and construction of new
factories, healthcare facilities, hotels and housing; the building of highways, bridges, railways and sewage
treatment facilities; and analysis and planning related to drilling, mining, energy transmission and storage.
This industry's performance is principally driven by trends in construction, manufacturing and mining
developments and increasingly from work in the fields of technological development and sustainability.
Industry revenue increased over the past five years, primarily due to strong investments in infrastructure,
building and industrial construction in developing economies across the globe. Over the five years to 2016,
industry revenue is estimated to grow an annualized 3.3% totaling $772.5 billion. The Global Engineering
Services industry has expanded steadily for over a decade, with the exception of 2009, when demand for
engineering services related to residential and commercial construction deteriorated following the onset of
global recession. Since then, the industry has rapidly recovered. Increased urbanization and a growing
middle class spurred growth in projects related to energy and power production. In addition, lower
unemployment and higher disposable incomes in mature economies such as the United States increased
demand for engineering services related to residential construction. As a result, IBISWorld estimates that
industry revenue will increase 2.5% in 2016 alone.
In the next five years, stronger global economic growth and construction activity is forecast to help
increase industry revenue an annualized 4.2% to $947.8 billion in 2021. The continued development of
newly industrialized nations and the expansion of environmentally focused projects will expand the
industry's geographic and downstream markets. However, industry profit is expected to increase slightly,
as continued trends in consolidation among the industry's largest players will abate pricing pressures for
large-scale construction and development projects, while anticipated growth in the total number of
industry operators will lead to rising competition, thereby pressuring industry tenders on smaller
engineering jobs.
Key External Drivers

The key sensitivities affecting the performance of the Global Engineering Services industry include:
GDP of the BRIC nations
Trends in GDP growth of the BRIC nations (Brazil, Russian, India and China) underpin demand for
engineering services, as countries such as India and China have had high rates of construction, engineering
and design growth over the past five years. As these economies rapidly expanded, so did demand for
engineering services. However, economic growth in many of these countries has ebbed in the past several
years. The GDP of the BRIC nations is expected to increase in 2016.
Global aggregate private investment
Private fixed investment includes spending by individuals and businesses on physical structures,
equipment and software, and is typically broken down into residential and nonresidential components.
Increasing investment into structures and equipment will result in an increase in demand for industry
services. Global aggregate private investment is expected to decrease in 2016, representing a potential
threat for the industry.
Industrial production index of OECD countries
The industrial production index of Organisation for Economic Co-operation and Development (OECD)
countries measures the output in manufacturing, mining, electric, gas and water utilities industries of the
34 OECD countries. Increased industrial production will require engineering services to update or build
WWW.IBISWORLD.COM
March 2016
new facilities or infrastructure. The industrial production index of OECD countries is expected to increase
slightly in 2016.
LIBOR - London Interbank Offered Rate
The London Interbank Offered Rate (LIBOR) is the primary benchmark for short-term interest rates
around the world. Engineering projects are typically financed because of their high cost. Therefore, a rise
in interest rates would make borrowing more expensive and would likely slow investment funds. The
LIBOR is expected to decrease in 2016.
World GDP
Trends in global GDP growth underpin demand for engineering services. Increasing GDP typically results
in an increase in demand for engineering services to sustain population and economic development. World
GDP is expected to increase in 2016, representing a potential opportunity for the industry.
Current Performance
Global Engineering Services industry revenue increased during the five years to 2016, aided by a rise in
global construction spending and an improvement in the world economy. Industry revenue has grown
from a depressed base, as the recession ushered in a decline in engineering activities related to residential
and commercial construction in developed economies such as the United States, Japan and the European
Union. Recently, however, a sharp global rebound in energy, industrial and environmental downstream
markets (which use engineering consultants for feasibility studies), project design, construction oversight
and management, has reinvigorated industry revenue.
As a result of these trends, industry revenue is expected to increase at an average annual ra te of 3.3% to
$772.5 billion during the five years through 2016. The pace of industry expansion is slightly ahead of the
pace of world GDP (3.2%) and corresponds with the residential and commercial construction rebound in
leading developed economies such as the United States, which accounts for a substantial portion of this
industry's revenue in terms of geographic markets.
Economic upswing
In the five years to 2016, engineering revenue for developed economies vacillated. In the first few years of
this period, the United States and European Union experienced more tepid economic growth, and recovery
in the global economy especially the expansion of mainland China, Asia and other developing economies,
as well as the strength of commodity-driven economies, such as Canada and Australia drove Global
Engineering Services industry revenue. In recent years, an expedient decline in oil, energy and commodity
prices as well as ebbing economic growth in China led to slowing demand for engineering and construction
services in emerging nations. Consequently, Global Engineering Services industry revenue is expected to
increase by only 2.5% in 2016. Nevertheless, throughout the past five years, government infrastructure
projects have been and continue to be key drivers for industry revenue. Solid investment trends have
prevailed in the heavy industrial, electricity, water and transportation markets, which typically require
high levels of engineering design and management.
While growth in vital emerging markets may have slowed, demand for industry services from developing
nations continues to improve. From 2011 onward, residential and commercial construction in the United
States accelerated, leading to improved industry profit margins and revenue. However, investment in
residential, commercial and infrastructure developments has remained constrained in other vital regions,
such as Europe, due to slowing income and employment growth and fragile investor confidence. Europe
has experienced uneven gains during the past five years, which has led to divergent demand for
engineering services. In the southern periphery of the Eurozone, especially in Italy, Portugal and Spain,
commitments to fiscal austerity and instability in the financial markets have depressed investments in
large-scale construction and infrastructure development projects. At the same time, areas of Northern
Europe, such as Germany, Sweden and Norway are experiencing more robust economic and population
growth, which has translated new infrastructure projects and greater demand for engineering services. For
example, in 2014, construction began on the Fehmarnbelt Tunnel, a new 18-kilometer immersed
WWW.IBISWORLD.COM
March 2016
transportation link between Denmark and Germany. This project, which includes a double-track railway
and four-lane tunnel for highway traffic is anticipated to cost $7.7 billion, with the European Union's
Trans-European Transport Network Commission expected to pledge a maximum $1.7 billion for the
project's design and planning. Infrastructure developments of this size and scale have benefited large
multinational engineering companies and smaller regional operators in this industry.
In emerging economies, investments in infrastructure projects have also grown during the past five years.
In September 2012, China, in an effort to meet demands of a burgeoning middle-class and propel economic
growth, approved at least 60 infrastructure projects worth more than $150.0 billion. An increase in global
construction spending is also evidenced by a rise in the value of global aggregate private investment, much
of which is reserved for spending on physical structures; global aggregate private investment is estimated
to increase at an annualized rate of 2.6% to $14.1 trillion in the five years to 2016.
Trends and demand
As industry revenue improved and spending on engineering services related to construction projects
increased, more companies entered the industry. In the five years to 2016, the number of engineering
services companies is estimated to increase an annualized 2.8% to 710,000. Despite more companies
entering the industry, there has been a trend toward consolidation among the leading consulting firms.
Many of the industry's largest players have international operations, which are important for positioning
themselves to bid for projects in the North American, European and other accelerating economies across
the globe. For example, the California-based Jacobs Engineering Group has engaged in a series of strategic
partnerships and acquisitions since 2011, with one of the latest and largest being the acquisition of
Australian-based Sinclair Knight Merz for about $1.2 billion, which vastly expanded Jacobs' presence in
Australia and South America. However, these acquisitions pale in comparison to AECOM's purchase of
URS Corporation, a global provider of engineering, construction and technical services in October 2014.
The deal, which totaled more than $53.9 billion, created an integrated engineering and construction firm
with operations in over 150 countries and roughly 95,000 employees.
The energy and power market is the largest segment for the Global Engineering Services industry,
accounting for an estimated 42.0% of global industry revenue in 2016. Rapidly expanding urban
populations and a growing global middle class, especially in emerging economies, have increased global
energy demand. This has resulted in a spike in engineering services for building projects related to mining,
exploration and the transmission and storage of oil, coal and natural gas. Over the five-year period,
demand for procurement and construction services related to the building of thermal, nuclear and
alternative power plants and energy facilities has also increased. However, demand from this vital
downstream market significantly stalled in 2015 and 2016, as an expedient decline in oil, gas and
commodity prices stifled investments in new mining and exploration projects.
Nonetheless, increasing concerns about global warming and carbon footprints have largely driven
downstream demand in the alternative power segment. In particular, industry operators have experienced
expanding demand for environmental and renewable and clean energy projects. During the past five years,
companies like Bechtel Corporation have been involved in major solar and hydroelectric projects in the
United States and Canada.
Improved profit
Following a surge in profitability during the early part of the past decade and largely influenced by buoyant
world economic conditions, the global recession caused a sharp decline in industry profit. During the past
five years, however, increased demand has improved revenue; IBISWorld estimates the average industry
profit margin to reach 8.6% in 2016, up from 7.3% in 2011. Profit margins have been aided by improved
operating efficiencies, application of new technologies and stabilization of cash flow through long-term
operation contracts. Some engineering firms have also been able to take advantage of the aforementioned
opportunities in emerging downstream markets, such as growth in the power-generation and energy
market, widening profit margins. Other firms have broadened their range of professional services by
adopting a multidisciplined structure or forming strategic alliances with other professional firms.
WWW.IBISWORLD.COM
March 2016
As global revenue increased and industry profit slowly improved, employment in the Global Engineering
Services industry is estimated to increase at an annualized rate of 3.8% to 4.1 million workers in the five
years to 2016. Although this growth is sound, still uncertain economic conditions around the globe have
created a highly competitive business environment in an industry that largely competes on tender, with
clients selecting the firm that can complete a project at the lowest cost. This, in turn, has put pressure on
wage, employment and profit margin expansion.
WWW.IBISWORLD.COM
March 2016
Industry Outlook
Over the next five years, the Global Engineering Services industry will continue to benefit from an upswing
in the global economy, driven by strong economic growth across Asia, the Middle East and South America.
This driver, combined with increased rates of urbanization, a growing global population and an expanding
worldwide middle class will propel demand for investments in infrastructure, power and energy industries,
benefiting engineering firms, which provide technical, design and management services for construction
projects. Industry revenue is forecast to grow at an average annual rate of 4.2% to $947.8 billion during the
five years through 2021. Steady revenue expansion, however, will be tempered by constraints in mature
economies, where large public debt, austerity programs and muted population growth will lead to lower
demand for industry services related to infrastructure and residential construction projects. Also, in the
near-term, lower energy prices and demand for natural resources will mitigate demand for engineering
services from resource-rich and emerging nations.
Growth markets
Despite a poorer short-term outlook for debt-laden countries under austerity budgets, governments,
especially in the European region, will increasingly look to public-private partnership arrangements, in
which the burden of financing and operation costs are shared between the government and private sector
to facilitate road, power and water supply infrastructure projects.
In other markets, demand for engineering services is expected to swell during the next five years. An
anticipated rise in global population and global per capita income will likely bolster demand for materials
and consumer goods. These factors will boost worldwide industrial production, which will be more
pronounced in developing or emerging nations. However, even in more mature economies, industrial
output is expected to expand; for example, the industrial production index in the United States is expected
to increase at an annualized rate of 2.0% in the five years to 2021. Investment into industrial capacity will
drive demand for engineering design services related to the construction of new factories and plants.
Expanding industrial capacity will also improve engineering firm revenue for process management services
and asset management services for the maintenance and operation of existing plants.
As global industry revenue rises, the number of enterprises in the industry is forecast to rise at an
annualized rate of 3.4% to 838,000 in the five years to 2021. Industry employment is projected to increase
by 3.9% to 4.9 million employees during the same period, as a greater demand for engineering services will
facilitate a need for more workers.
An industry overexposed to energy markets
The energy and power market is estimated to account for more than 40.0% of Global Engineering Services
industry revenue. During the past five years, an increase in global demand for oil and natural gas propelled
new oil and gas exploration projects, particularly in developed nations, including Canada, Great Britain
and the United States. This, in turn, benefited industry operators, which commonly provide permitting,
environmental assessments and other engineering services for oil and gas exploration companies.
However, an ample global supply of crude oil and natural gas as well as concerns of an economic slowdown
in countries like Japan and China have led to a rapid decline in global crude oil prices during the latter-half
of 2014 through 2016. Large industry operators, such as AECOM and Fluor Corporation, are dependent on
the current and future price expectations for oil and natural gas, as lower energy prices typically decrease
spending on exploration, drilling, refining and other activities. Therefore, stagnant energy prices have the
potential to depress demand for new energy projects and temper revenue growth for many industry
operators.
In addition, profit margins are forecast to increase marginally during the next five years, as competitive
conditions remain intense. Engineering firms will aggressively chase contracts around the globe,
particularly with the risk of a struggling European Union potentially weighing on industry growth. The
high level of competition will put downward pressure on industry tenders, limiting margin growth.
IBISWorld forecasts industry profit will rise marginally from 8.6% in 2016 to 8.7% in 2021.
WWW.IBISWORLD.COM
March 2016
Structural trends
While the pace of industry expansion will primarily be determined by general economic growth,
construction activity and investment in plant and equipment, the industry will also be subject to structural
developments. These will include the steady migration of global production and services toward Asia and,
to a lesser extent, toward Eastern Europe and South America, as well as the spread of major Western
consulting firms into developing markets to generate contract revenue and access low-cost professional
labor.
Industry globalization, coupled with advances in communication and information technology, could result
in the industry's major international players sourcing an increasing proportion of professional labor from
outside their countries of origin. Most major engineering-consulting firms maintain substantial resources
across global markets and can access suitably qualified personnel in lower-cost countries (e.g. India and
China) to work remotely on design projects for clients in any market. This combined with emerging market
demand for industry services related to infrastructure projects, such as the construction of roads, airports
and harbors, and numerous large-scale power plants, will continue fuel Global Engineering Services
industry revenue during the next five years. Therefore, China and India are forecast to remain among the
world's fastest-growing economies and largest geographic market for industry services in the five years to
2021.
WWW.IBISWORLD.COM
March 2016
10
Industry Life Cycle

This industry is in the mature stage of its life cycle.
Life Cycle Stage
Long-term demand is supported by growing technological complexity in industrial, infrastructure and
environmental processes
Long-term growth is supported by the trend toward the outsourcing of work to independent
consultants
Greater globalization of this industry expands demand and industry resources
The Global Engineering Services industry is in the mature phase of its life cycle. IBISWorld estimates that
industry value added (IVA), which measures the industry contribution to GDP, will rise at an annualized
rate of 4.0% during the 10 years to 2021. During the period, global GDP is forecast to rise at an annualized
3.6%. While the industry's growth is slightly ahead of the overall economy, the industry's services are
widely accepted by downstream markets.
Furthermore, the industry services a diverse mix, including the public and private sector, construction and
maintenance, mining and energy and industrial and transport markets. The industry will receive some
stimulus from the opportunities derived from globalization and the increasing demand for environmentally
friendly projects. While these new downstream and geographic markets provide growth opportunities, the
basic services provided will be unchanged.
Although the number of companies in the industry has risen by an annualized 3.1% during the 10 years to
2021, the industry's largest companies have entered a period of consolidation, typically growing through
regional acquisitions. For example, Jacob's Engineering Group has been a part of roughly 10 acquisitions
during the past five years. Furthermore, the industry's largest player, AECOM Technology Corporation,
completed its acquisition of industry operator URS Corporation for more than $53.9 billion in 2014.
WWW.IBISWORLD.COM
March 2016
11
Products & Markets

Supply Chain
Key Buying Industries
B-GL - Global Mining
Mining companies require asset management and process operation services.
D-GL - Global Electricity, Gas and Water Supply
Companies in this industry demand asset design and management services for power, gas and water
infrastructure.
E3512-GL - Global Non-residential Building Construction
Firms in this industry use project design and management services.
E3711-GL - Global Infrastructure and Non-building Construction
Businesses in this industry require project design and management services.
H-GL - Global Transport, Post and Storage
Establishments in this division demand asset design and management services.
M7111-GL - Global Public Administration and Defense
This industry uses asset management and outsourced design and procurement services.
Key Selling Industries
E-GL - Global Construction
Firms in this division supply construction services to consultants.
J-GL - Global Financial Intermediation
Companies in this division provide financial services such as banking, project finance facilitation and
professional indemnity insurance.
L-GL - Global Business Activities
Businesses in this division provide specialized services to engineering firms on a consulting basis. These
include architectural services, surveying, landscape architecture, building inspection services and drafting.
L6713-GL - Global Accounting Services
Engineering firms require accounting services, bookkeeping and accounts management.
WWW.IBISWORLD.COM
12
March 2016
Products & Services

Building construction
16.0%
Energy and power
42.0%
Industrial and manufacturing
8.0%
Other services
Transportation
4.5%
18.1%
Water, sewer and waste
11.4%
Engineering services for energy and power

The energy and power market is the largest segment for the Global Engineering Services industry,
accounting for an estimated 42.0% of global industry revenue in 2016. For the majority of the past five
years, an increase in the global demand for hydrocarbon (oil, natural gas, coal) energy has propelled new
projects related to the drilling, mining, exploration, transmission and storage of energy related products.
Developed nations, such as the United States, Canada and Great Britain have all experienced a rapid
increase in investments in shale and natural gas development projects. Other nations, such as Russia and
China have increased investments in energy related projects as well. Engineering firms are essential to this
market, in that they provide design, analysis, planning and construction oversight for these projects.
However, slowing economic growth in emerging nations led to falling demand for commodities as well as
an expedient drop in oil and natural gas prices from 2014 onward has depressed demand oil and gas
engineering services in recent years.
Also included in this segment is revenue derived from the construction and maintenance of traditional
thermal power plants, alternative power plants (solar, hydropower, geothermal), electric transmission lines
and electric substations. The power market has been vital to engineering revenue during the past five
years, as emerging countries will likely continue to increase their demand for power related projects, to
support a burgeoning middle class.
Engineering services for transportation
The transportation market is estimated to account for 18.1% of global industry revenue. Engineering
services revenue is derived from design and construction management oversight for highway, bridge,
railway and harbor development projects. A significant portion of revenue from this segment is dependent
on government spending for infrastructure developments. Global spending on transportation related
infrastructure projects has increased during the past five years. Moreover, the rapid emergence of Public
Private Partnerships (PPPs) has provided steady demand for engineering services related to infrastructure
and transportation projects. PPPs are unique funding structures, whereby the private sector is responsible
for the design, engineering, construction and overall financing of public infrastructure projects, while the
government then leases these developed assets, such as an airport or harbor facility for long durations,
often up to 30 years.
Engineering services for building construction
WWW.IBISWORLD.COM
March 2016
13
This market, which includes the revenue related to the construction of offices, retail locations, healthcare
facilities, hotels and housing, is estimated to comprise 16.0% of the Global Engineering Services industry
revenue in 2016. Revenue from office and retail construction projects is dependent on consumer spending
and corporate profit margins, as higher consumer spending generally facilitates the need for more shops
and stores and rising profit levels enable companies to expand their business by hiring more workers and
opening new offices
Revenue growth from residential projects are dependent on changes in demand for single and multifamily
housing units, The housing market's severe downturn during the recession led to a decline in demand for
engineering services, but growth in US housing demand since 2012 has helped revenue from this market
segment recover.
Projects in the general building market are heavily dependent on credit. Engineering firms benefit from
low interest rates that lower the cost of borrowing money to fund future construction projects. In
developed countries, historically low interest rates have aided this market and low projected interest rates,
during the next five years, will continue to encourage residential and com mercial building.
Water, sewer and waste engineering services
This market accounts for an estimated 11.4% of total industry revenue in 2016. It includes revenue that
engineering firms receive from projects related to sewage, storm sewers, industrial water waste disposal
and sewage treatment plants. Also included in this category is revenue from projects related to drinking
water supply, such as dam and reservoir construction and the building of pipes for water transmission. The
construction of desalination plants has been an important driver for industry revenue in the past five years.
In 2013, Saudi Arabia announced a plan to fund the world's largest desalination plant; plants like this are
needed in arid, water-poor countries, such as Saudi Arabia, where over more than half of the water
consumed is desalinated.
Industrial and manufacturing engineering services
The industrial and manufacturing market accounts for an estimated 8.0% of global industry revenue in
2016. Engineering services firms derive revenue from work, which includes the design, oversight and
construction of new factories for industrial and manufacturing companies. Downstream demand from this
segment comes from metal refineries, industrial mills, chemical plants, food processing plants and
consumer goods manufacturers. In the past five years, this market's share of total industry revenue has
slightly increased, expanding in line with patterns in global economic growth and industrial production.
For example, through 2013 industrial and manufacturing engineering revenue was driven by strong
demand in emerging economies. In the past several years, slowing economic growth and lower factory
construction in nations, such as China led to lower demand for these engineering services.
WWW.IBISWORLD.COM
14
March 2016
Demand Determinants
The global demand for engineering services is principally determined by investment trends into buildings,
structures, capital equipment and the environment, and the design content of new investment. Industry
activity is heavily weighted toward demand generated in the larger economic regions such as North
America, the European Union and East Asia. Growth in the world's gross fixed capital, particularly in
nonresidential construction, directly stimulates demand for engineering services in the preplanning
(assessment and feasibility), design and management of projects.
The key determinants of industry demand are trends for investment into new engineering construction and
infrastructure; trends for investment into nonresidential building activity; the pace of global GDP growth;
growth in sectors involving complex capital equipment and structures (e.g. mining, manufacturing and
transport); the privatization of public sector assets, particularly utilities such as power generation,
telecommunications, water and gas networks, and mass transport systems; the outsourcing of in-house
engineering services by public sector authorities and private corporations to independent consultants; the
growth in funding of environmental management programs (e.g. assessment and pollution abatement);
and trends for investment into industrial production capacity and technologically advanced processes.
The industry also derives substantial demand from the staging of major events (e.g. the 2012 London
Olympic Games and the 2014 Brazil FIFA World Cup), the effects of natural disasters (e.g. tsunami damage
in Japan, earthquake in New Zealand and Haiti) and in response to geopolitical situations (e.g. military
engagement in Iraq and the decommissioning weapons in the former USSR). These one-off stimuli can
involve the provision of specialist engineering services in risk assessment, project design, logistics and
procurement management, and construction project management.
The industry derives stable long-term revenue from the provision of asset management and maintenance
services to clients. These maintenance activities can involve process design and management in
manufacturing plants; life cycle planning and measurement on public transport infrastructure; urban
planning services; and environmental design and monitoring services.
Major Markets
Private business
46.1%
Government bodies
36.6%
Construction
5.1%
Architectural
4.6%
Other engineering
Individuals
4.6%
3.0%
The Engineering Services industry provides construction planning, design, feasibility and other services to
a range of markets.
Private businesses
WWW.IBISWORLD.COM
March 2016
15
Private businesses are the single largest market for industry operators, estimated to account for 46.1% of
industry revenue in 2016. Major companies require engineering services for a variety of construction
processes ranging from major commercial and industrial buildings to large residential complexes. Energy
and natural resource companies also represent a significant market within the private businesses segment
as engineers are used to maintain compliance and ensure structural safety. In addition, engineering firms
are hired to design and manage complex equipment for industrial processes, including, refining,
distillation and chemical processing.
Over the past five years, demand from private businesses has increased because as improving economic
growth and business confidence as well as historically low lending rates led to rising global private
construction spending. This, in turn, boosted demand for engineering services companies, which typically
oversee the design, management, operation and maintenance of construction projects. Demand from
private businesses is expected to grow in the five years through 2021 as low interest rates encourage
investment.
Government bodies
Government bodies are estimated to account for 36.6% of industry revenue in 2016 and includes demand
from federal, state and local governments. Government bodies require engineering services for
nonbuilding infrastructures, such as roads, water storage facilities, power plants and pipelines. The public
sector also relies on engineering companies for the planning and design of nonresidential buildings,
including offices, hospitals, correctional facilities, stadiums and schools. Additionally, engineering services
are required for environmental planning projects and waterways to ensure safe construction and
operation.
Over the past five years, demand from government bodies declined slightly. Briefly following the global
recession, this segment accounted for a larger proportion of industry revenue, as stimulus packages
implemented by the emerging and developed nations were aimed at keeping workers in jobs while
improving public infrastructure. However, in 2016, many of these projects have been completed.
Nevertheless, the emergence of public-private partnership arrangements, in which the burden of financing
and operation costs are shared between the government and private sector, have provided new sources of
funding for costly infrastructure projects.
Engineering, construction and architectural firms
Engineering, architectural and construction firms are expected to account for 4.6%, 4.6% and 5.1% of
industry revenue in 2016, respectively. These firms require engineering services for specialized installation,
operations, logistics, training and systems support services. Since 2011, a steady rise in global construction
spending has boosted demand for engineering services for these markets.
Individuals and nonprofit organizations
Individuals and nonprofit organizations are projected to account for 3.0% of industry revenue in 2016.
These clients require engineering services for residential projects as well as for commercial construction in
the case of nonprofit organizations.
International Trade
Exports in this industry are low and steady.
Imports in this industry are low and steady.
This industry does not participate in traditional trade. However, for the industry's largest companies, a
significant share of revenue, an estimated 16.0%, comes from projects outside a company's country of
WWW.IBISWORLD.COM
March 2016
16
origin. This percentage has increased gradually over the past decade, as rapidly growing economies in
developing nations and strong investments in transportation, infrastructure and energy in Asian markets
have increased demand for the engineering services of foreign firms.
The principal trade flows in this industry are from the developed markets of North America and Europe,
toward the developing markets and particularly following trends in manufacturing activity and the
production of resources and energy. The leading players in the North American market maintain
substantial operations outside America, typically generating 25.0% to 30.0% of their annual revenue from
foreign-based activities. Similarly, players in other developed economies maintain substantial operations
outside their original markets and typically compete through strategic alliances or international branch
operations.
WWW.IBISWORLD.COM
March 2016
17
Business Locations
Region
North America
3 0.0
Europe
2 0.0
Africa & Middle East
1 9.5
North Asia
1 3 .6
Oceania
6.2
India & Central Asia
5.5
South America
5.0
South East Asia
0.7
Knowledge-based consulting industries such as this typically evolve in more complex developed economies
and gradually spread globally to meet the growing demand for the provision of services in developing
regions, and to accompany aligned industries into new markets (e.g. following the global expansion of
construction, mining and manufacturing). Industry activity is therefore heavily concentrated in the
developed OECD countries, which are estimated to account for just under 75.0% of industry revenue.
The geographic spread of industry revenue per region is relatively balanced. North America is estimated to
account for more than 30.0% of industry revenue, with the bulk of industry activity being concentrated in
the United States and Canada. Aside from this region's high concentration of engineering services revenue,
North America is home to the highest share of the industry's largest companies, with AECOM, Jacobs,
Fluor (all from the United States) and SNC-Lavalin Group (from Canada) based in this region. The largescale, multidisciplined engineering consulting firms, which are based in North America, typically generate
a significant share of revenue in other regions, notably Europe, South America, the Middle East and North
Asia.
Europe accounts for just over 20.0% of industry revenue, which is well below the region's 35.0% share of
world GDP. This region's slower population and economic growth as well as comparatively up-to-date
bridge, road and other infrastructure structures are possible explanations for Europe's underrepresented
share of engineering service revenue. The European industry is dominated by firms operating in the three
largest economies: the United Kingdom, France and Germany. The Netherlands also has an above-average
share of activity in the region and contains two of the world's largest engineering services companies,
Arcadis Group, and Fugro NV.
Asia including Australia is estimated to account for just below 25.0% of industry revenue. Firms operating
in this region tend to have relatively low representation among the industry's largest companies and are
often focused toward the provision of specialized professional skills to a specific segment of the market,
notably energy projects in Australia and infrastructure projects in countries like China. The Asian and
Australian region includes major engineering firms: China Power Engineering Consulting Group, which
focuses on electric power planning, design, procurement and engineering in China, and Japan's JGC
Corporation, which specializes in the design and construction management of industrial plants and
refineries.
WWW.IBISWORLD.COM
March 2016
18
Africa and the Middle East comprise about 20.0% of industry revenue. Most engineering services in this
region are dedicated to projects related to power and energy exploration. An increase in the worldwide
demand for commodities including oil and a rise in global commodity prices, have also led to an increase in
building and infrastructure development in this region over the past decade.
In addition, engineering services derive revenue from South and Latin America. The largest South
American player in this industry is estimated to be Concremat Engenharia e Tecnologia S.A. of Brazil.
WWW.IBISWORLD.COM
March 2016
19
Competitive Landscape
Market Share Concentration
Industry concentration is low.
The industry has a low degree of market share concentration, with the four largest companies contributing
to less than 5.0% of annual global industry revenue. The industry has a fragmented structure and contains
many small-scale establishments that confine their operations to national, regional or even local markets,
or to the delivery of a narrow range of specialized services.
Despite this low concentration, there has been a trend over the past decade toward consolidation of
operations of many of the world's leading consulting engineering firms, through mergers or strategic
alliances. For example, Jacobs Engineering, one of the industry's largest operators, has engaged in a series
of strategic acquisitions and joint-ventures since 2011. These large-scale, multidisciplined, multinational
companies are well placed to win contracts in most markets.
Key Success Factors

The key success factors in the Global Engineering Services industry are:
Having contacts within key markets
Having an established network and sound reputation among the key players in each market enhances the
likelihood of being invited to tender on contracts.
Access to highly skilled workforce
Regional or periodic shortages of suitably qualified labor is an important constraint on industry expansion,
and successful firms demonstrate the capacity to attract and retain a skilled workforce.
Ability to compete on tender
Successful firms are capable of winning contracts through tender while ensuring adequate cash flow
without compromising long-term profitability.
Ability to quickly adopt new technology
Technological advancements, like production and construction technologies, affect the capacity of firms in
this industry to efficiently compete in most markets.
Having a wide and expanding product range
Firms must have the demonstrated capacity to undertake a broad range of consulting engineering services.
WWW.IBISWORLD.COM
March 2016
20
Cost Structure Benchmarks
Wages
3 8.5%
Purchases
1 9.8%
Rent & Utilities
6.2 %
Depreciation
1 .6%
Marketing
1 .3%
Other
2 4 .0%
Profit
8.6%
Profit
In 2016, it is estimated that the industry profit before the deduction of taxes and interest represents 8.6%
of total revenue, up from 7.3% in 2011. Nevertheless, profit margins are down from highs of more than
9.0% prior to the subprime mortgage and global financial crisis. Despite rising profit margins, competition
in the industry remains high. Major operator Fluor Corporation, during the past five years, have stated in
its financial filings that the still uncertain economic conditions around the globe ha ve created a highly
competitive business environment that is consistently putting pressure on profit. The industry largely
competes on tender, with clients selecting the firm that can most successfully complete a project at the
lowest cost. As a result of continued competition, significant growth in profit is not expected during the
next five years.
Wages
This is a professional knowledge-based industry, which supplies fee-based engineering services to clients;
consequently, labor costs account for the bulk of industry revenue. Total wages are expected to account for
38.5% of industry revenue in 2016, including direct payments to employees and payments to
subcontracted and freelance labor.
Over the past five years, wage costs have risen marginally and are largely the result of bounce back from
employment and wage stagnation during the global recession. Gains in labor efficiency have also resulted
from the substantial restructuring of the industry through the amalgamation of ownership, outsourcing
employment to low-cost countries and the adoption of labor-saving technologies (mainly computer and
telecommunications equipment).
Purchases
The purchase of materials, information technology equipment, including architectural and design software
licenses, as well as supplies and general overheads (e.g. transport, administration and legal expenses),
currently absorbs 19.8% of industry revenue. Industry operators must pay for a significant portion of the
costs of a project, depending on the contract. Fixed-price contracts require an operator to name a price up
front, based on all costs and the desired profit. Others are cost reimbursable, with the price varying based
WWW.IBISWORLD.COM
March 2016
21
on costs incurred for time and materials. As a result, the cost of purchases can vary greatly from project-toproject.
Other costs
Rental costs for office premises, other buildings and equipment accounts for 6.2% of annual industry
revenue. Subcontract payments to professional and skilled labor are estimated to account for only 5.5% of
annual industry revenue. Similar to architectural firms, engineering companies can split projects with
other related industry, design, or construction companies, with one firm operating in a leadership role and
the other acting as a consultant. During periods of tight supply conditions on the skilled and professional
labor market, the larger consulting firms generally opt for direct employment of labor to ensure an
adequate supply of skills when tendering for contracts. The hiring of subcontractors is more common in
smaller markets where demand for services can be erratic.
During the past decade, industry operating costs have generally remained stable as a share of revenue,
although professional indemnity insurance costs have steadily trended up since the early 2000s due to
instability on global financial markets.
WWW.IBISWORLD.COM
March 2016
Basis of Competition
Competition is high and increasing
The industry is highly competitive, as engineering contracts are typically determined on the combined
basis of price differentiation, proven capabilities and the existing relationships with clients of fellow
contractors. While the industry is characterized by its many small-scale consulting firms that operate in
narrow regional or service-specific markets, there has been a gradual trend toward consolidation among
many of the world's leading engineering firms. These large-scale, multidisciplined international
consultancies employ talented personnel with high technical capabilities and have the financial resources
to maintain costs and manage risks; thus, they are well placed to win contracts in most markets.
Competition is principally based on experience and a reputation for quality, although price differentiation
is an important element of competitive tendering. Specialized expertise in niche markets is a hallmark of
the industry (e.g. working on nuclear energy construction or decommissioning). In specialized markets, a
close and almost exclusive relationship often exists between consultants and the client.
There is a growing trend for engineering consultants to join a development consortium comprising
financiers and construction firms for the purposes of bidding for contracts. The practice of forming
consortia enables participants to spread the risks and direct costs associated with tendering for contracts
enables the participants to leverage off the strengths of the consortium partners and increases the
probability of successful bids.
22
WWW.IBISWORLD.COM
March 2016
23
Barriers to Entry
Barriers to entry are medium and increasing.
Barriers to Entry checklist
Level/Impact
Industry Competition
Industry Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation and Policy
Industry Assistance
High
Low
Mature
Low
High
Medium
Low
SOURCE: IBISWORLD
This industry is considered to have medium barriers to the entry of new competitors, although more
stringent barriers may apply on an individual country basis.
Potential entrants into this industry are generally required to hold academic qualifications in engineering
or an aligned field, and typically also hold membership in an appropriate professional association.
Appropriate tertiary qualifications for entry into this industry include a Bachelor of Engineering, or an
Associate Diploma of Engineering. Industry participants may also hold qualifications in aligned fields such
as quantity surveying, applied sciences and architecture.
Membership in professional associations that are aligned with the global federation may ease the entry of
new players into this industry, as such associations provide technical support on issues like professional
indemnity, industrial relations, risk management and terms of engagement. The umbrella organization is
the International Federation of Consulting Engineers. Country and regional member associations include
the American Council of Engineering Companies and the European Federation of Engineering Consultancy
Associations.
The technical complexity of most construction projects undertaken by this industry is the largest ba rrier to
entry for new competitors. New entrants have difficulty establishing a foothold in this industry given the
presence of multinational players with demonstrated capacities across a range of complex projects.
Consequently, economies of scope are a barrier to entry, as major engineering contracts are often awarded
to large-scale, multidisciplined industry operators, which have an in-house capacity to tender for prime
construction contractor roles and can therefore leverage on the engineering design com ponent of projects
while still remaining competitive within the total project parameters.
WWW.IBISWORLD.COM
March 2016
24
Industry Globalization
The level of globalization is medium and increasing.
This industry has a medium level of globalization as the larger consulting firms maintain networks of
branches or strategic alliances across several markets to secure international contracts. Most of the major
players currently generate a significant share of annual revenue outside their country of origin and several
generate the bulk of their revenue from outside their country of origin.
The leading Netherlands-based consulting groups generate the majority of their revenue from foreign
operations, with Arcadis NV deriving about 70.0% of revenue outside the Netherlands and Fugro NV
generating about 90%. Each of these companies annually ranks within, or close to, the top 10 global players
in this industry.
The major US consulting firms all maintain substantial operations outside the United States, with Kellogg
Brown Roots (KBR) operating in more than 70 countries and Fluor Corporation maintaining a network of
offices across 60 countries. In addition, Jacobs Engineering has made several strategic acquisitions to
improve its global spread, including the company's September 2013 announcement to purchase Australian
firm Sinclair Knight Merz, a company that serves mining and power plant construction firms in Australia,
Asia and South America.
WWW.IBISWORLD.COM
March 2016
25
Major Companies
There are no major players in this industry
Other Players
AECOM Technology Corporation
Estimated market share: 1.0%
AECOM (Architecture, Engineering, Consulting, Operations and Maintenance) Technology Corporation
was founded in 1980 as Ashland Technology Company. Following an employee buyback, AECOM was
created in 1990 and is now headquartered in Los Angeles. AECOM provides fee-based professional
technical, design, engineering and construction support services. The company vastly expanded in October
2014, with the acquisition of URS Corporation, a global provider of engineering, construction and technical
services; the deal totaled more than $53.9 billion. Combined, AECOM and URS have more than 92,000
employees and operations in over 150 countries. Currently AECOM's operations are organized into three
reportable segments: design and consulting services (DCS); construction services (CS) and management
services (MS).
Relevant to this industry, the company's DCS segment delivers planning, consulting, architectural,
environmental and engineering services to private businesses and government clients. In addition, the
company's MS segment provides facilities maintenance, technical assistance and systems integration
services, primarily for the US government sector. Prior to its acquisition, URS Corporation, now part of
AECOM, also derived a substantial portion of industry revenue from US federal projects, which included
engineering and management services for the Department of Defense and the National Aeronautics and
Space Administration (NASA). Major international infrastructure projects for AECOM have included the
Oldman River Dam in Canada, Hong Kong master planning, the Kingairloch Hydroelectric Power Station
in Scotland, overseeing the Libyan Housing and Infrastructure program and the London Olympics and
Legacy Master Plan.
However, the majority of AECOM's revenue is derived from the private sector, as the company services a
number of downstream markets, including transportation, industrial, institutional, healthcare and
environmental.
AECOM has performed well over the past five years, with industry-relevant revenue expected to total $8.0
billion in 2016. However, with the acquisition of URS, AECOM is heavily dependent on crude oil and
natural gas production, especially in North America, as the company has revenue exposure across the
energy cycle. For example, the company provides permitting, environmental assessments and other
engineering services for upstream oil and gas exploration; the company is also involved in oil and gas
pipeline design, as well as maintenance services for gas and petrochemical processing facilities.
Consequently, a sharp decline in commodity prices is expected to negatively impact revenue in 2016, as
some of AECOM's oil and gas clients have deferred, suspended or terminated construction and engineering
contracts.
Jacobs Engineering Group Inc.
Estimated market share: less than 1.0%
WWW.IBISWORLD.COM
March 2016
26
Jacobs Engineering Group was founded in 1947, incorporated in 1957 and went public in 1970. It is
currently headquartered in Pasadena, CA, and has more than 64,000 employees and over 200 global
offices. Jacobs provides engineering, consulting, construction and maintenance services to a variety of
industries and markets. Downstream markets include chemicals and polymers, federal infrastructure
programs (notably defense and aerospace programs), nonresidential buildings, pharmaceuticals and
biotechnology, petroleum and gas refining, pulp and paper, civil infrastructure, technology and
manufacturing.
Jacobs operates through four business segments: project services; process, scientific and systems
consulting; construction; and operations and maintenance. Historically, the company generates just over
50.0% of revenue from project services, most of which is relevant to this industry. The company's largest
markets are national government programs (21.8%), chemicals and polymers (19.7%), downstream
refining (16.1%) and infrastructure (13.4%). The United States is Jacobs' largest geographic market,
generating roughly 60.0% of revenue, followed by Europe and Canada.
Some of the company's recent major US contracts include a joint contract with Bechtel for a $7.0-billion
expansion of the Motiva Enterprises refinery in Port Arthur, TX; an indefinite delivery, indefinite quantity
architect and engineering services contract from NASA for shuttle landing facilities at the Cape Canaveral
Air Force Station in Florida and Vandenberg Air Force Base in California, as well as facilities at the
Kennedy Space Center in Florida. In May 2014, Jacobs was selected by Saint-Gobain, a building materials
company, to provide planning, interior design and engineering services for the company's new 320,000
square foot North American headquarters in Malvern, PA. In November 2014, Jacobs received a general
engineering consultant contract from the Texas Department of Transportation to provide services for
construction projects developed under the Design-Build and public-private partnership agreements.
Globally, Jacobs has worked on a variety of major contracts, including civil engineering projects, such as a
joint venture with Arup for a new cable-stayed bridge across the River Forth in Scotland; oil and gas
related projects, including a contract from the BP Exploration Operating Company to support its Sullom
Voe oil and liquefied gas terminal in Shetland Island, Scotland; and a multiyear contract to provide
engineering, procurement and construction management services for Chevron's Cape Town, South Africa
refineries signed in November 2014. In March 2015, the company was awarded a contract by Network Rail
to provide topographical surveys, geotechnical investigations and tunneling design for a new rail link to
London Heathrow airport. More recently, in February 2016, Jacobs received a contract from the
Manchester Airports Group to provide multidisciplinary engineering and architectural services for a 10year airport transformation program in the United Kingdom.
Industry-relevant revenue at Jacobs is expected to grow for most of the past five years, partly due to its
aggressive acquisition and joint-venture strategies. Since 2011, the company has been a part of m ore than
10 acquisitions. In December 2013, the company acquired Sinclair Knight Merz Management (SKM), an
engineering, design, construction and project management services firm. In 2014, Jacobs also acquired
Federal Network Services; Eagleton Engineering; FMHC Corporation; and a variety of other construction,
design and engineering companies. Other large acquisitions and joint-ventures during this period include a
55.0% interest in Consulting Engineering Services, a leading power, infrastructure and civil engineering
company, headquartered in Delhi, India, and the acquisition of Aker Solutions' Process and Construction, a
global company operating in the oil, gas and refining markets.
However, revenue is expected to slightly decline to $6.4 billion in 2016. While the company has cited
continued strength in the global infrastructure and healthcare markets, the swift drop in commodity prices
has led to weak demand from oil, gas and mining engineering projects from 2015 onward.
CH2M HILL Companies Ltd.
WWW.IBISWORLD.COM
March 2016
27
CH2M Hill is a private employee-owned consulting engineering company with headquarters in Denver.
Founded in 1946, the company began doing public-works projects in the northwestern United States,
rising to fame with the Lake Tahoe Advanced Wastewater Treatment Facility project. CH2M Hill is derived
from the names of the founders of the company: Holly Cornell, James Howland, T. Burke Hayes and Fred
Merryfield. Hill was added to the name after the 1971 merger with Clair A. Hill and Associates. The
company currently employs a workforce of roughly 25,000 and operates in more than 170 offices
worldwide, but an estimated 60.0% of its revenue is earned in the United States.
CH2M Hill's consulting services include water and wastewater systems, hazardous waste, general civil
engineering, environment testing, aquatic biology studies, geologic studies, industrial plant and processes,
transportation systems, planning and land use, economic appraisals, building environment systems,
structures and foundations, corrosion control, energy systems, surveying, agricultural engineering, mining,
program management and construction management. In 2011, the group restructured its operations
according to client groups served by the company: government, environment and nuclear, facilities and
infrastructure, and energy and water.
Major recent projects include the US Department of Energy's Hanford Reservation environmental project
in Washington state; a contract to manage operations and environmental remediation at the Nevada Test
Site; a contract for cleanup work at Britain's civil nuclear sites; water reclamation plants and the Deep
Tunnel Sewerage System in Singapore; the $5.3-billion Panama Canal Expansion Program; the Thames
Tideway Tunnel scheme; Abu Dhabi's first zero-carbon, zero-waste city, Masdar City; and the $14.0-billion
development of the 2012 London Olympics. CH2M Hill has also been awarded a contract to engineer the
building 12 Stadia for the 2022 FIFA World Cup in Qatar.
As with many of its competitors, CH2M Hill has grown through acquisitions. In 2013, the company
completed the acquisition of British-based Halcrow, a global engineering company with 6,000 employees.
Halcrow will continue to contribute to the company's facilities and infrastructure divisional revenue and
industry relevant revenue at CH2M Hill is expected to total $3.9 billion in 2016.
Fluor Corporation
Fluor Corporation was founded in 1980 and incorporated in 2000. Currently headquartered in Irving, TX,
the company has more than 38,500 employees and has operations in roughly 25 countries. Fluor is divided
into five business segments: oil and gas, industrial and infrastructure, government, global services and
power. The company provides expertise in electrical, mechanical, control systems, civil, structural and
architectural engineering. Aligned with these disciplines Fluor offers feasibility studies, project planning,
technology evaluation and risk management assessment. The company also provides engineering
specialties, including chemical and process engineering, simulation services and interactive 3D modeling.
Moreover, Fluor has a construction entity that operates separately from the rest of the business and
provides management and construction services for Fluor projects in the United States and Canada.
Historically, the oil and gas segment is the company's biggest earner, generating 55.4% of revenue,
followed by the industrial and infrastructure segment (22.5%), government (14.1%), power (5.2%) and
global services (2.8%). Fluor derives just over 40.0% of revenue from the United States. The remainder of
revenue is equally parsed from Canada, Europe, Africa and the Middle East. The company has limited
operations in the Asia-Pacific region.
Revenue growth at Fluor has been fueled by the company's oil and gas segment, which grew as global
demand for oil and gas pushed clients to support growth and increased demand for Flou r's engineering
services. In September 2013, Fluor was awarded an engineering and design contract by South Louisiana
Methanol for a new gas-to-methanol facility. These positive developments in Flour's oil and gas segment
partially offset steep losses in the company's mining and metals, as well as its industrial and infrastructure
segment, which was driven by a decline in global commodity prices and downstream mining related
WWW.IBISWORLD.COM
March 2016
28
projects. However, lower oil prices have the potential to negatively impact company projects as oil and
energy companies may delay major capital investments. As key projects in the mining, metals and
industrial segments were deferred due to lower commodity prices, Fluor's revenue declined by doubledigits in 2014 and 2015. Consequently, Fluor's industry-relevant revenue is expected to total $3.4 billion in
2016.
WWW.IBISWORLD.COM
March 2016
29
Operating Conditions
Capital Intensity
The level of capital intensity is low.
1.
n
2.
n
3.
n
The industry has a low level of capital intensity and high labor intensity. The ratio of wages to capital
depreciation charges is indicative of an industry's relative labor or capital intensity, as this shows the
amount of revenue absorbed by labor and capital inputs into production. IBISWorld estimates that
industry operators will spend $0.04 on capital for every $1.00 spent on wages in 2016.
This is a knowledge-based industry and the principal end product is the provision of professional
engineering design, assessment and management services. Labor costs absorb 38.5% of annual industry
revenue (including employees' wages and payments to subcontractors), and a substantial proportion of the
workforce are highly paid professionals and technical staff, which further heightens the labor-intensity of
production.
The widespread adoption of a flat management structure of operation, coupled with the greater used of
advanced modeling and communications technology, is likely to have resulted in a minor reduction in the
industry's labor intensity over the past decade. The adoption of new computer-based technologies to aid
design measurement and monitoring is expected to have significantly enhanced labor productivity, enabled
firms to operate across wider geographic markets and helped them to better use existing personnel.
Technology & Systems

The level of technology change is high.
It is incumbent upon firms competing in this industry to demonstrate an understanding technological
change across all aspects of industrial production, construction and environmental processes, and to
harness technological advancements for equipment and materials. Consultant engineers operate in a
client-driven market and therefore look to secure a reputation for technical capacity in a target market. The
problem-solving nature of this industry often requires consultants to provide innovative technological
solutions to expedite processes and construction with the view to saving time, money and resources. The
application of new or innovative technologies typically heightens the risk associated with the project, as the
failure will result in increased delays and costs, and erode profit margins. However, the successful
application of new technologies tends to shore up the consultant's profit margins while enhancing their
reputation.
The effects of technological change over the past decade has been most evident in the widespread adoption
of communication, computer aided design and data management and retrieval equipment. The principal
objective of investment into new technology is to increase labor productivity, though this new technology
also enhances a firm's capacity to compete for contracts across geographically disperse markets and to
broaden the scope of services offered. Intelligent use of common technology such as computing equipment,
remote access to analytics through software-as-a-service platforms, video-conferencing and other
communications technologies enables relatively small organizations to control a broad range and
geographical spread of personnel and contracts, while sophisticated modeling software allows for
improved cost-effectiveness in project assessment and monitoring.
Computer-aided design
WWW.IBISWORLD.COM
March 2016
30
The use of computer-aided design (CAD) is widely considered to be one of the most important
technological advances in the Engineering Services industry. Operators can use new computer programs to
assist in the creation, modification, analysis and optimization of a design. CAD systems can create
technical drawings that includes much more than the creation of shapes and structures; it includes
information such as materials, processes and dimensions.
These programs help operators provide a cost-effective method of project assessment and the development
of three-dimensional modeling has allowed for even more complex systems. CAD software can even be
implemented on tablets to access the information from the construction site, serving to increase its
penetration throughout the engineering and construction process. The CAD systems are even being
implemented in building and structure maintenance. The software can track material serial numbers and
manufacturers for replacement, and even alert managers to a potential problem in the structure.
Revenue Volatility
Industry revenue volatility is low.
Volatility in this industry is moderated by the spread engineering services across a variety of downstream
markets and geographic regions. As a result, the Global Engineering Services industry has experienced
relatively stable growth rates during the past five years. Through 2014, growth in worldwide energy
projects, which occurred at the same time, provided a boost to industry related revenue. However, an
expedient decline in oil, gas and commodity prices has depressed demand for natural resource related
engineering and construction projects in 2015 and 2016. Nevertheless, Global Engineering Services
industry revenue will continue to be supported by growth in residential and nonresidential construction,
particularly in developed nations, such as the United States.
This industry is vulnerable to a decline in large, publicly funded infrastructure projects, which could be
constrained in the future by high government deficits, fiscal austerity and muted economic growth,
particularly in developed nations. However, downstream demand for industry services related energy,
water, waste management, and industrial construction are all anticipated to expand in the next five years.
US residential and commercial construction is also expected to expand, representing an additional boost to
industry revenue.
Regulation & Policy

The level of regulation is medium and the trend is steady.
This industry operates in a highly regulated environment in most developed countries; however, the
regulatory regime seldom crosses national borders, leading to inconsistencies between project locations.
In individual countries, the industry is subject to state licensing and registration, which involves holding
the appropriate technical qualifications and suitable insurance coverage. In OECD countries, this requires
a commitment to comply with building codes, occupational health and safety guidelines and environmental
responsibilities. The European representative body, EFCA, is promoting the proposal for a Professional
Card for engineers, providing recognition of qualifications and enhancing the mobility of highly qualified
personnel across Europe.
Most medium and large-scale consultant firms in these countries hold international accreditation to gain
access to the public tendering process. This accreditation includes the standard ISO 9001:1994 and specific
ISO accreditation for specialized applications (e.g. environmental and waste management). The ISO 9001
is a standard requiring a company's commitment to quality.
WWW.IBISWORLD.COM
March 2016
Industry Assistance
The level of industry assistance is low and the trend of industry assistance is steady
There are no specific tariffs for this industry.
No tariff or quota systems apply to international trade in services. However, governments often have
procurement guidelines that favor the use of local engineering services on publicly funded or strategically
secure construction projects.
31
WWW.IBISWORLD.COM
32
March 2016
Key Statistics
Industry Data
EmployEstablishment
ments
Enterprises (Thousands
(Thousands) (Thousands) of people)
Revenue
($b)
IVA
($b)
Exports
($b)
Imports
($b)
Wages
($b)
World GDP
($ trillion)
2007
595.2
284.4
597
568
2008
621.4
288.0
624
593
3,231
229.2
57.2
3,350
231.6
2009
2010
2011
599.3
628.9
655.6
280.2
289.9
309.1
622
634
649
56.9
591
602
617
3,291
3,391
3,384
228.3
239.7
251.4
55.2
56.8
57.2
2012
678.2
325.5
662
629
3,600
260.0
57.6
2013
2014
2015
703.1
740.1
753.3
339.7
357.9
365.6
683
709
726
649
673
690
3,714
3,878
3,968
268.1
282.0
288.7
58.5
59.5
61.1
2016
2017
2018
772.5
376.4
747
710
4,081
297.6
62.5
809.5
856.2
394.7
414.0
775
807
735
765
4,259
4,472
312.2
325.7
64.8
67.2
2019
2020
889.1
917.9
429.1
443.6
834
859
790
814
4,636
4,782
337.4
349.2
69.9
72.7
2021
947.8
456.9
884
838
4,933
359.0
75.6
WWW.IBISWORLD.COM
33
March 2016
Annual Change
Establishments
Enterprises
(%)
(%)
Employment
(%)
Exports
(%)
Imports
(%)
Wages
(%)
World GDP
(%)
4.4
3.7
N/C
N/C
1.0
-0.5
-0.3
1.9
-0.3
1.9
-1.8
3.0
N/C
N/C
N/C
N/C
-1.4
4.9
-3.0
2.9
6.7
5.3
2.4
2.0
2.5
1.9
-0.2
6.4
N/C
N/C
N/C
N/C
4.9
3.4
0.7
0.7
3.7
5.3
4.3
5.4
3.2
3.8
3.2
3.7
3.2
4.4
N/C
N/C
N/C
N/C
3.1
5.2
1.6
1.7
2015
2016
2017
1.8
2.5
4.8
2.2
3.0
4.9
2.4
2.9
3.7
2.5
2.9
3.5
2.3
2.8
4.4
N/C
N/C
N/C
N/C
N/C
N/C
2.4
3.1
4.9
2.7
2.3
3.7
2018
5.8
4.9
4.1
4.1
5.0
N/C
N/C
4.3
3.7
2019
2020
3.8
3.2
3.6
3.4
3.3
3.0
3.3
3.0
3.7
3.1
N/C
N/C
N/C
N/C
3.6
3.5
4.0
4.0
2021
3.3
3.0
2.9
2.9
3.2
N/C
N/C
2.8
4.0
Revenue
(%)
IVA
(%)
2008
4.4
1.3
4.5
2009
2010
-3.5
4.9
-2.7
3.4
2011
2012
4.2
3.4
2013
2014
Key Ratios
IVA/revenue
(%)
Imports/
demand
(%)
Exports/
revenue
(%)
Revenue per
employee
($'000)
Wages/
revenue
(%)
Employees
per est.
Average
wage
($)
2007
2008
2009
2010
47.8
46.4
46.8
46.1
0.0
0.0
0.0
0.0
N/C
N/C
N/C
N/C
184.2
185.5
182.1
185.5
38.5
37.3
38.1
38.1
5
5
5
5
70,937.8
69,134.3
69,401.4
70,687.1
2011
2012
47.1
48.0
0.0
0.0
N/C
N/C
193.7
188.4
38.3
38.3
5
5
74,290.8
72,222.2
2013
2014
48.3
48.4
0.0
0.0
N/C
N/C
189.3
190.8
38.1
38.1
5
5
72,186.3
72,717.9
2015
2016
48.5
48.7
0.0
0.0
N/C
N/C
189.8
189.3
38.3
38.5
5
5
72,757.1
72,923.3
2017
2018
2019
2020
48.8
48.4
48.3
48.3
0.0
0.0
0.0
0.0
N/C
N/C
N/C
N/C
190.1
191.5
191.8
192.0
38.6
38.0
37.9
38.0
5
6
6
6
73,303.6
72,830.9
72,778.3
73,023.8
2021
48.2
0.0
N/C
192.1
37.9
72,775.2
Figures are inflation-adjusted 2016 dollars

NOTE: UNLESS SPECIFIED, AN ASTERISK (*) ASSOCIATED WITH
A NUMBER IN A TABLE INDICATES AN IBISWORLD ESTIMATE AND
REFERENCES TO DOLLARS ARE TO US DOLLARS.
WWW.IBISWORLD.COM
March 2016
34
Jargon
CIVIL ENGINEERINGArea of engineering focused on the planning, designing, construction, and
maintenance of infrastructure.
INDUSTRIAL ENGINEERING Area of engineering focused on managing efficient production and involves
the design of production methods, plant analysis and the application of labor and materials.
INITIAL PUBLIC OFFERING (IPO) The issuing of a companys common stock to the public for the first
time.
PUBLIC-PRIVATE PARTNERSHIP (PPP) A contractual agreement between a public-sector agency and a
private company, through which each party shares skills, assets and financial resources to deliver a
service or facility for public use.
TENDER A written offer or bid to contract goods or services at a specified cost or rate.
WWW.IBISWORLD.COM
March 2016
www.ibisworld.com | www.ibisworld.com.au | www.ibisworld.co.uk | www.ibisworld.com.cn
35
IBISWorld's reports are more than just numbers.

They combine data and analysis to answer the
questions that successful businesses ask.
Who is IBISWorld?
We are strategists, analysts, researchers and marketers. We
provide answers to information-hungry, time-poor businesses. Our
goal is to provide real-world answers that matter to your business.
When tough strategic, budget, sales and marketing decisions
need to be made, our suite of industry, economy and risk reports
give you thoroughly researched answers quickly.
IBISWorld Membership
IBISWorld offers tailored membership packages to meet your
needs.
Disclaimer
This product has been supplied by IBISWorld Inc. (IBISWorld) solely for use by its authorized licensees
strictly in accordance with their license agreements with IBISWorld. IBISWorld makes no representation to
any person with regard to the completeness or accuracy of the data or information contained herein, and it
accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for
loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance
upon, the data or information contained herein. Copyright in this publication is owned by IBISWorld Inc.
The publication is sold on the basis that the purchaser agrees not to copy the material contained within it
for other than the purchasers own purposes. In the event that the purchaser uses or quotes from the
material in this publication in papers, reports or opinions prepared for any other person it is agreed that
it will be sourced to IBISWorld Inc.

L6722 GL

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

L6722 GL

Caricato da

Copyright:

Formati disponibili

CONTENTS

Error! No text of specif ied sty le in document.

IBISWorld Industry Report

Global Engineering Services

About This Industry..................................... 2

Industry Performance ................................. 4

Products & Markets ..................................... 11

Competitive Landscape ............................. 19

Market Share Concentration ......................... 19

Major Companies ......................................... 25

Operating Conditions .................................. 29

Key Statistics ................................................. 32

www.ibisworld.com | www.ibisworld.com.au | www.ibisworld.co.uk | www.ibisworld.com.cn

Global Engineering Services

About This Industry

Global Engineering Services

Global Engineering Services

Key External Drivers

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Industry Life Cycle

Global Engineering Services

Products & Markets

Global Engineering Services

Products & Services

Energy and power

Industrial and manufacturing

Water, sewer and waste

Engineering services for energy and power

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Africa & Middle East

India & Central Asia

South East Asia

Global Engineering Services

Global Engineering Services

Key Success Factors

Global Engineering Services

Cost Structure Benchmarks

Rent & Utilities

Global Engineering Services

Global Engineering Services

Global Engineering Services

Barriers to Entry checklist

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Global Engineering Services

Technology & Systems

Global Engineering Services

Regulation & Policy

Global Engineering Services

Global Engineering Services

Global Engineering Services