The economic recovery and renewed construction activity will drive industry growth
Los Angeles, CA (PRWEB) June 19, 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,” says IBISWorld industry analyst Kevin Culbert. “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 an average 1.0% annually in the five years to 2012 to an estimated $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,” says Culbert. “Technological advancements in key markets, such as telecommunications and power generation, have also been increasingly important for long-term industry growth.” The Engineering Services industry is fragmented, with a large number of small-scale establishments. About two-thirds of firms are nonemployer 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. Consequently, the number of enterprises has stayed relatively flat from 2007 to 2012. 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 as demand for non-residential buildings expands. Profit margins are also forecast to improve, particularly among larger players that provide services like construction management. The Engineering Services industry is characterized by many small establishments that typically confine operations to a regional market or to specialized niche activities. The industry displays a low concentration of ownership, and the top four industry players are URS Corporation, Fluor Corporation, Bechtel Corporation and KBR Inc. For more information, visit IBISWorld’s Engineering Services in the US industry report page.
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IBISWorld industry Report Key Topics
Industry establishments are engaged in applying physical laws and principles of engineering in the design, development and utilization of machines, materials, instruments, structures, processes and systems. These services may involve the provision of advice, preparation of feasibility studies, preparation of plans and designs, provision of technical services during the construction or installation phase, inspection and evaluation of engineering projects and related services.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.