Electrical Design & Engineering

Electrical Design & Engineering Services Global Market Outlook

• The global electrical ED market is expected to reach USD 1.61 trillion in 2023 from USD 1.54 trillion in 2022 with a growth of 4.5%. It is forecasted that the market will go up to USD 1.85 trillion in 2026 with a CAGR of 4.74%.

• The Electrical Design and Engineering service market is primarily driven by the increasing construction activities across various sectors. The increase in population across every region leads to increase in urbanization of many tier 2 and tier 3 cities resulting development in infrastructure

Drivers and Constraints : Electrical Design & Engineering Services

Drivers

• Increasing Urbanization: The tier-2 and tier-3 cities across the world are getting numerous infrastructural development in order to distribute the growth all over the country and not in particular places to avoid population density

• Government regulation/initiatives: Governments across the world are investing a lot for the infrastructure development of the country. Recently US government has passed an infrastructural bill with an investment around USD 1 trillion

• Building refurbishment: The buildings constructed a long time ago will have to be renovated or upgraded with latest technologies for better living space. This will be a continuous process in the construction industry

Constraints 

• Recruiting and retaining staff: Lack of skilled workers and retention of skilled labors by the suppliers even after increase in wages, due to inflation is a major bottleneck

• Technology adoption: The buyers are expecting the suppliers to adopt latest technology in order to complete the project in lesser timeline but the investment for adopting those technologies are high and adding to it is the lack of skilled worker for using the technology

• Energy Crisis: The global energy crisis due to the Russia Ukraine conflict has triggered the increase in raw material prices and it is anticipated that the industry will experience a rise in prices of the electrical components

Global Market Analysis

• The industry is highly fragmented across all the regions, with the top 10 firms accounting for only approximately 5 percent of the market

• The global industrial buyers generally prefer sub-contracting electrical engineering and design services to a large EPC/EPCM contractor as a turn-key/design-build project to eliminate risk and ease of implementation

Market Outlook

• The global electrical design and engineering industry is expected to reach USD 1.54 trillion in 2022 and forecasted to go up to USD 1.87 trillion in 2024 with a CAGR of 10.12 percentage.

• The demand for the electrical design services is driven by the new construction segment, namely healthcare/pharmaceutical, commercial, green buildings, and industrial facilities

• The majority share of the global market size is occupied by APAC with 50% and followed by Europe with 17%.

Cost Structure of Electrical Engineering & Design Services

• The cost of construction is determined on the basis of four major components: cost of materials, cost of labor, cost of construction equipment, and administrative expenses. Labor cost contributes to a maximum of 35–40 percent of the overall cost of construction. Labor cost differs widely, depending on the availability of skilled labor in the particular country.

Price Drivers

• The overheads and margins depends on the market condition and supply–demand situation

• The company cannot make any adjustment to taxes and benefits, as they are fixed by the government

• The more complexity in the design and specification of the required electrical systems, higher the cost. It also varies based on criticality of requirements

• Hiring and retaining skilled laborers are the greatest challenges in the construction industry. Increasing wage in the construction industry, due to a lack of skilled labor, is a major threat to construction companies, as it reduces the profit margins

Why You Should Buy This Report

• Information about engineering market analysis, electrical engineering design services market size, maturity, trade dynamics, industry trends, technology trends, and drivers and constraints.
• Regional market outlook and supplier analysis of major players like Affiliated Engineers Inc., WSP Global, ME Engineers, etc.
• Best procurement practices like sourcing, contract and pricing models.