L6722-GL Global Engineering Services Industry Report.pdf

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1、IBISW1-800-330-3772infoIBISW INDUSTRY REPORT L6722-GLGlobal Engineering ServicesKush Patel|November 2021Global Engineering ServicesNovember 20212IBISWContentsCOVID-19(Coronavirus)Impact Update.3ABOUT THIS INDUSTRY.5Industry Definition.5Major Players.5Main Activities.5Supply Chain.6INDUSTRY AT A GLAN

2、CE.7Executive Summary.9INDUSTRY PERFORMANCE.10Key External Drivers.10Current Performance.11INDUSTRY OUTLOOK.14Outlook.14Industry Life Cycle.16PRODUCTS&MARKETS.17Supply Chain.17Products&Services.17Demand Determinants.19Major Markets.19Business Locations.21COMPETITIVE LANDSCAPE.23Market Share Concentr

3、ation.23Key Success Factors.23Cost Structure Benchmarks.23Basis of Competition.26Barriers to Entry.26Industry Globalization.27MAJOR COMPANIES.28Other Companies.28OPERATING CONDITIONS.30Capital Intensity.30Technology&Systems.31Revenue Volatility.32Regulation&Policy.33Industry Assistance.33KEY STATIST

4、ICS.34Industry Data.34Annual Change.34Key Ratios.34ADDITIONAL RESOURCES.35Additional Resources.35Industry Jargon.35Glossary.35Global Engineering ServicesNovember 20213IBISWCOVID-19(Coronavirus)Impact UpdateIBISWorlds analysts constantly monitor the industry impacts of current events in real-time her

5、e is an update ofhow this industry is likely to be impacted as a result of the global COVID-19 pandemic:Rebound in oil and gas prices are expected to increase investment in infrastructure from this importantdownstream market and lower demand for the Global Engineering Services industry.For more deta

6、il,please see theDemand Determinants chapter.Quarantine measures and border closures enacted by global governments are expected to increase transportationand purchasing expenses for globally procured materials.This will likely contribute to a forecast decline in industryprofit.For more detail,please

7、 see the Current Performance chapter.Demand from government bodies is often countercyclical,growing when the overall economy is declining.This isexpected to moderate the decrease in industry revenue in 2020.For more detail,please see the DemandDeterminants chapter.Note:The content in this report is

8、currently being updated to reflect the trends outlined above.Global Engineering ServicesNovember 20214IBISWAbout IBISWorldIBISWorld specializes in industry research with coverage on thousands of global industries.Our comprehensive data and in-depth analysis helpbusinesses of all types gain quick and

9、 actionable insights on industries around the world.Busy professionals can spend less time researchingand preparing for meetings,and more time focused on making strategic business decisions that benefit you,your company and your clients.Weoffer research on industries in the US,Canada,Australia,New Z

10、ealand,Germany,the UK,Ireland,China and Mexico,as well as industries thatare truly global in nature.Global Engineering ServicesNovember 20215IBISWAbout This IndustryIndustry DefinitionEnterprises in the Global Engineering Services industry apply physical laws and principles of engineering in thedesi

11、gn,development and use of machines,materials,instruments,structures,processes and systems.Assignmentsmay involve the provision of advice,preparation of feasibility studies,preparation of preliminary and final plans anddesigns,the provision of technical services on construction and project evaluation

12、.Operators may also provideinspection and evaluation services.Major PlayersThere are no major players in this industryMain ActivitiesThe primary activities of this industry are:Providing design and management services for construction and engineering infrastructure projectsProviding design and manag

13、ement services for environmental projectsProviding design and management services for industrial processes and equipmentProviding construction management servicesProcess management(e.g.assessing engineering and product problems)Project planning and economic assessmentsFeasibility studies,including e

14、nvironmental impact assessment and community consultationProviding quality management assessment and accreditation servicesThe major products and services in this industry are:TransportationEnergy and powerBuilding constructionWater and waste treatmentIndustrial and manufacturingOther servicesGlobal

15、 Engineering ServicesNovember 20216IBISWSupply ChainSIMILAR INDUSTRIESGlobal Non-residential BuildingConstructionGlobal Infrastructure and Non-building ConstructionGlobal Architectural ServicesGlobal Graphic Designers RELATED INTERNATIONAL INDUSTRIESEngineering Services in the USBuilding Inspectors

16、in the USCredit Counselors,Surveyors&Appraisers in the USCorrosion Protection EngineeringServicesEngineering Consulting inAustraliaEngineering Services in ChinaConsultant Engineering Servicesin the UKEngineering Services in CanadaEngineering Consulting in NewZealandConsultant Engineering Servicesin

17、Ireland Global Engineering ServicesNovember 20217IBISWIndustry at a GlanceKey Statistics$1.6trRevenueAnnual Growth201620214.4%Annual Growth202120262.1%Annual Growth20162026$184.3bnProfitAnnual Growth201620216.0%Annual Growth20162021 11.7%Profit MarginAnnual Growth201620210.9pp Annual Growth20162021

18、456kBusinessesAnnual Growth201620211.3%Annual Growth202120261.5%Annual Growth20162026 3mEmploymentAnnual Growth201620212.3%Annual Growth202120262.0%Annual Growth20162026$498.4bnWagesAnnual Growth201620214.3%Annual Growth202120262.0%Annual Growth20162026Key External Drivers%=201621 Annual Growth2.7%G

19、lobal aggregate privateinvestment0.8%Industrial production index ofOECD countries2.2%World GDP-0.6ppLIBOR-London InterbankOffered Rate Industry StructurePOSITIVE IMPACT Capital IntensityLow ConcentrationLowMIXED IMPACT Life CycleMature Revenue VolatilityMedium Regulation&PolicyMedium/Steady Barriers

20、 to EntryMedium/Increasing Industry GlobalizationMedium/IncreasingNEGATIVE IMPACT Industry AssistanceLow/Steady Technology ChangeHigh CompetitionHigh/Increasing Key TrendsGrowing global private investment has benefited the industryGlobal Engineering ServicesNovember 20218IBISWProducts&Services Segme

21、ntation Major PlayersThere are no major players in this industrySWOTSTRENGTHS High Profit vs.Sector Average Low Customer Class Concentration Low Product/Service Concentration High Revenue per Employee Low Capital Requirements WEAKNESSES None OPPORTUNITIES High Revenue Growth(2016-2021)High Performan

22、ce Drivers THREATS Very Low Revenue Growth(2005-2021)Low Outlier Growth Low Revenue Growth(2021-2026)Global Engineering ServicesNovember 20219IBISWExecutive SummaryCompanies operating in the Global Engineering Services industry apply the physical laws and principles ofengineering to design and devel

23、op structures,machines,materials,instruments and other processes and systems.Services also include providing advice,feasibility studies,designs and technical services during construction ordevelopment.Consequently,the performance of the industry relies on investment trends and the overall health oft

24、he economy to fuel projects where engineering services are needed.Strong investment in major markets,such asthe United States,Europe and East Asia,has driven industry growth in recent years.As a result,industry revenue isanticipated to grow an annualized 4.4%to$1.6 trillion over the five years to 20

25、21,including an increase of 10.5%2021 alone.A healthy economic environment enables downstream operators to invest in expansions,new projects and otherventures that demand engineering services.Global private investment has grown an annualized 2.7%over the fiveyears to 2021,which has benefited the ind

26、ustry.A higher level of production in OECD countries has translated tonew facilities,factories and other structures,which lead to growth in industry revenue.Over the past five years,slowgrowth in the energy sector,as a result of declining commodity prices,has tamed revenue growth,but increasinginves

27、tment in clean energy and emerging markets have lowered this effect.Operators in mature markets have setout to improve profit by acquiring smaller enterprises,expanding to new regions and offshoring engineers inemerging markets to cut costs.In 2020,due to the spread of COVID-19(coronavirus),the pric

28、e of crude oil andglobal aggregate private investment fell,which negatively affected industry revenue and profit growth.Industry profit,measured as earnings before interest and taxes,is estimated to account for 11.7%of revenue in 2021.Global economic growth and growth in private investment in East A

29、sia are anticipated to drive industry growthmoving forward.Industry revenue is expected to grow an annualized 2.1%to$1.7 trillion over the five years to 2026.The continued development of emerging markets and the expansion of environmental projects will likely expand theindustrys downstream markets a

30、s well.Also,strong consolidation activity during the current period is expected toaid growth in industry profit alongside a forecast recovery in global commodity prices,which should drive investmentin higher-value projects.Global Engineering ServicesNovember 202110IBISWIndustry PerformanceKey Extern

31、alDriversGlobal aggregate private investmentGlobal aggregate private investment includes spending by individuals and businesses across the world on physicalstructures,equipment and software.It is typically broken down into residential and nonresidential segments.Increasing investment into structures

32、 and equipment would increase demand for engineering services since thesuccess of new projects requires them.Global aggregate private investment is expected to increase in 2021,representing a potential opportunity for the industry.Industrial production index of OECD countriesThe industrial productio

33、n index of countries participating in the Organisation for Economic Co-operation andDevelopment(OECD)measures the output in the manufacturing,mining,electric,gas and water utility industries ofthe 34 OECD countries.Increased industrial production will likely require engineering services to update or

34、 buildnew facilities or infrastructure.The industrial production index of OECD countries is expected to increase in 2021.World GDPTrends in global GDP growth underpin demand for engineering services.Increasing GDP typically results in anincrease in demand for engineering services to sustain the popu

35、lation and economic development.World GDP isexpected to increase in 2021.LIBOR-London Interbank Offered RateThe London Interbank Offered Rate(LIBOR)is the primary benchmark for short-term interest rates across the world.New construction projects require financing,and therefore,rising interest rates

36、would make borrowing moreexpensive and would likely slow private investment,which could hurt demand for engineering services.The LIBORis expected to decrease in 2021,but is expected to increase in the future,posing a potential threat to the industry.Global Engineering ServicesNovember 202111IBISWCur

37、rentPerformanceThe Global Engineering Services industry provides surveys,technical andfeasibility studies and general engineering planning for new projects in avariety of different industries.Typical projects that demand engineering services include new factories,public infrastructure,sewage treatme

38、ntfacilities and buildings.As a result,industry performance is driven by investment trends and the health of theseindustries.Growth in investment by both the public and private sectors has a strong influence on demand for engineeringservices because it fuels the development of new projects.Since eng

39、ineering services are required across a varietyof industries that make up a large portion of the entire economy,world GDP is a strong indicator of the aggregatehealth of these industries,and therefore,of industry performance.The growth of major economies drives a largeportion of industry revenue,and

40、 growth in global investment in projects that require engineering services is expectedto fuel industry expansion.Thus,IBISWorld expects industry revenue to grow an annualized 4.4%to$1.6 trillionover the five years to 2021,including an increase of 10.5%in 2021 alone.COVID-19In 2020,due to the spread

41、of COVID-19(coronavirus),demand fromdifferent industries declined significantly as a result of domestic andglobal markets experiencing disruptions.In fact,the world price of crude oil declined 32.7%in 2020 alone.With employees and students working from home,demand from the nonresidential sector decl

42、ined as construction activities were interrupted.Instead of engineeringservices,governments were focused on investing in the healthcare sector to contend with the coronaviruspandemic.Additionally,the decline in corporate profit led to a decline in global aggregate private investment,whichfurther led

43、 to a decline in industry revenue.Thus,industry revenue declined 4.8%in 2020.ECONOMIC VOLATILITYIndustry growth during the period has been aided by growth in globalprivate investment,which has increased at an annualized rate of 2.7%over the five years to 2021.Revenue growth has also been fueled by t

44、he increase in world oil production that same year,which is representativeof increasing investment in the energy and power sectors that are crucial to industry performance.However,thedecline in world commodity prices has tempered industry revenue growth to a degree,by reducing investment inhigher-va

45、lue projects in the affected markets.In particular,historically low oil and gas prices in 2020,as a result ofGlobal Engineering ServicesNovember 202112IBISWlower consumer demand due to the coronavirus pandemic and a price war between Russia and Saudi Arabia,areexpected to reduce investment in infras

46、tructure projects that require industry services.The economy in Europe has been unsteady during the period,which has led to volatile demand for engineeringservices.In the southern Eurozone,especially in Italy,Portugal and Spain,commitments to fiscal austerity andinstability in financial markets have

47、 depressed investments in large-scale construction and infrastructuredevelopment projects.At the same time,areas of Northern Europe,such as Germany,Sweden,and Norway,haveexperienced more robust economic and population growth,which has translated to new infrastructure projects andgreater demand for e

48、ngineering services.As a result,Europe has been a source of volatility,which has increasedthe focus of many operators on operations in other parts of the world.This lag in the European market has been offset by solid growth in the United States and Asia.Although the UnitedStates has suffered some se

49、tbacks due to low commodity prices and government expenditure on infrastructure,elevated construction values during most of the period have promoted the growth of engineering services in thegeneral building segment of the industry.The GPD of East Asia is expected to grow an annualized 3.1%over thefi

50、ve years to 2021,and has fomented industry revenue growth through increased government expenditure oninfrastructure and general private investment in important segments,such as housing and commercial construction.INDUSTRY CONSOLIDATION IN MATURE MARKETSAs industry revenue is forecast to increase,ind