Renewed construction activity will raise demand for engineering services
Los Angeles, CA (PRWEB) February 25, 2012
If it works, thank an engineer; if it breaks, blame an engineer. Unfortunately, there is little any engineer could have done to stop the recent collapse in Engineering Services industry revenue. Revenue started to decline as downstream construction markets came to a halt during the recession. While long-term contracts allowed many engineering firms to maintain growth as the recession began, many companies delayed projects, causing a decline in engineering firms' backlogs. The shortage of liquidity in global financial markets also cut into demand for engineering services. These drops have caused revenue to fall 1.0% annually in the five years to 2012 to total $183.1 billion.
Engineering is one of the largest professional service markets. It applies scientific knowledge to design structures, products and industrial processes aimed at servicing the economy and society. The trend toward outsourcing engineering activities has supported the long-term expansion of the industry. Technological advancement in key markets, such as telecommunications and power generation, has also been increasingly important for long-term industry growth.
The Engineering Services industry is fragmented, with a large number of small-scale establishments, which often confines operations to regional markets or specialized niches. About two-thirds of firms are non-employer establishments, which were especially hurt by the recession. The decline in demand caused many of these small firms to leave the industry in 2009 and 2010. Similarly, many firms with employees reduced wages, head counts and the number of branch offices in order to maintain profit, which declined for many players as a result of poor demand.
In the five years to 2017, the industry is anticipated to grow as the economy recovers and the value of residential and non-residential construction rises. Revenue is projected to increase, supported by increased demand for non-residential buildings. Profit margins are also forecast to improve, particularly among larger players like Fluor Corporation and URS Corporation that provide services like construction management. For more information, visit IBISWorld’s Engineering Services in the US industry page.
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