IBISWorld Market Research
Investment in transport and telecommunications infrastructure is expected to drive industry growth.
Melbourne, Australia (PRWEB) June 11, 2014
As governments and private corporations outsource their engineering departments, industry consultants have become indispensable and expanded their reach across the globe through strategic alliances and joint ventures. The Engineering Consulting industry is expected to generate revenue totalling $41.7 billion in 2013-14, down 0.8% from the previous year. Over the five years through 2013-14, revenue is expected to grow by an annualised 2.7%, corresponding with robust expansion in investment trends in the downstream resources, infrastructure and environmental markets. However, this growth has slowed towards the end of the period. The industry's expansion has been accompanied by a trend towards consolidation and strategic alliances between the leading consulting firms. This has allowed firms to compete for tender based on wide knowledge bases.
The industry is highly labour-intensive, using a high knowledge component. Direct employment is expected to exceed 138,000 people in over 50,000 establishments in 2013-14. The industry workforce includes a substantial subcontracted and agency-based component, which has swelled over the past five years. This is consistent with the need for a flexible workforce to deal with large spikes in output normally associated with large-scale infrastructure projects. IBISWorld industry analyst Sebastian Chia states, “Industry revenue is forecast to decline over the next two years due to a winding back of investment in the non-building infrastructure markets, notably, mining developments.” Profit margins are expected to fall from the highs of the past five years, but will remain above the sector average. This will provide opportunities for firms that service the commercial and industrial building markets, with investment expected to rise over the coming five years. According to Chia, “This will be driven by the expectation of substantial government investment into transport infrastructure and continued investment into the National Broadband Network and large-scale gas and oil developments.”
The Engineering Consulting industry is characterised by low market share concentration. The industry consists of relatively few large-scale consulting firms, with the four largest players generating a small proportion of industry revenue. The degree of concentration has increased since the early 2000s, following the merger between GHD Group and Egis Consulting Australia and the joint venture arrangements on specific projects between several of the leading consulting firms. Concentration has also increased due to the penetration of the Australian market by leading global consulting firms such as US-based Bechtel Corporation and Black & Veatch. The industry’s major players are WorleyParsons Limited and Bechtel Australia Proprietary Limited. For more information, visit IBISWorld’s Engineering Consulting report in Australia industry page.
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IBISWorld industry Report Key Topics
Firms in this industry supply engineering consulting services and, to a lesser extent, quantity-surveying services. Primary activities include the design and management of construction and engineering infrastructure projects, environmental projects and industrial processes and equipment. Assignments may involve provision of advice, feasibility studies, plans and designs, technical and management services for construction and evaluation of environmental projects.
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