The economic recovery and renewed construction activity will drive industry growth.
New York, NY (PRWEB) January 13, 2014
Firms operating in the Engineering Services industry apply physical laws and principles of engineering to design and develop structures, machines, materials, instruments and other processes and systems. Services also include providing advice, preparing feasibility studies, preparing plans and designs and providing technical services during construction or development.
According to IBISWorld Industry Analyst Jeremy Edwards, “Subdued construction levels and anemic private demand have severely limited the Engineering Services industry over the past five years.” Industry 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 revenue growth as the recession began, many companies postponed or cancelled upcoming projects. The shortage of liquidity in global financial markets also cut into demand for engineering services. These declines have caused revenue to fall at an average annual rate of about 2.1% to total $199.5 billion over the five years to 2013. However, the construction market has begun to show signs of improvement; as a result, industry revenue is expected to increase 2.7% in 2013.
The Engineering Services industry is fragmented, with a large number of small-scale operators that often provide services to regional markets or specialized niches. About two-thirds of firms are nonemployers, which were hit particularly hard by the reduction in demand following the recession. As a result, many of these small firms were forced to leave the industry in 2009 and 2010. “Firms have begun to reenter, however, as business conditions have improved over the past two years,” says Edwards. Consequently, the number of enterprises is expected to grow at an annualized rate 0.8% to 141,639 in the five years to 2013.
In the five years to 2018, the industry is anticipated to grow as the economy recovers, the value of construction rises and demand from key downstream markets revives. Further emphasis on green building is expected to increase with growing corporate profit. Industry profitability is also forecast to improve slightly, especially among large operators that provide high-margin services, such as construction management. Profit margins should also benefit from the rising use of computer-aided design systems that provide cost-effective project assessment.
For more information, visit IBISWorld’s Engineering Services in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in Engineering Services industry distribute TV programs on a subscription or fee basis through direct broadcast satellites. The industry also includes multipoint distribution system operators that deliver wireless TV programming using ground stations. These companies operate in rural areas and have a negligible effect on industry performance. This industry excludes TV networks and other satellite telecommunications providers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
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Barriers to Entry
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