Engineering and Design Services
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

Engineering Services Industry Outlook & Drivers - Global Market Outlook

• The global engineering and design market is projected to grow at the CAGR of 1–3 percent to reach $1.50 trillion by 2023, primarily being driven by growing investment in transport, industrial, non-residential, and commercial infrastructure sectors in the emerging economies
• The majority of the firms in this industry operate in their national/regional markets due to:
  ̶ Expertise in specialized engineering services
  ̶ Myriad regional regulations
• A trend of mergers and alliances of various global engineering firms has been seen over the past decade to increase foothold in a single market segment. Larger suppliers in the market are more acquisitive and look to acquire smaller suppliers

The industry is highly fragmented across all regions, with the top 30 firms accounting for around 12–14 percent of the market share in 2017. In the US, several firms are indulging in horizontal merger, due to the increasing demand for a ‘one-stop-shop' for ED solutions
Buyers from the process industry, especially biotechnology, chemical, and pharmaceuticals sectors, prefer engaging with service providers, who provide turnkey solutions in designing advanced technology facilities.

High engineering services market maturity regions include North America, Western Europe And Australia. Medium engineering services market maturity regions are India, China, Brazil, Chile and Mexico. The engineering services industry outlook shows that there are new investments for industry expansion and large infrastructure investments in countries such as India, Indonesia and China are fueling the growth of ED services. The engineering services market analysis shows that increased outsourcing to emerging economies benefit developed economies, due to the availability of low- cost talent pool.

Engineering Services Market Outlook 

• The global ED industry is projected to grow at a CAGR of 4–5 percent by 2020. The demand for ED services is driven by infrastructure, residential and industrial sectors, seeking for process efficiency in the construction phase
• APAC has become an increasingly favourable destination for outsourcing ED services among players in the EU and the US, citing a low-cost talent pool.
• Large construction firms, especially with revenue more than $1 billion, increase their acquisition activities as a part of their strategy, in order to integrate design and construction together
• Global players are expanding their regional presence in especially in APAC with M&As. E.g., Tetra Tech's acquisition of Coffey and Aurecon's merger with AUP

Engagement Outlook

Buyers prefer engaging with integrated service providers, primarily for megaprojects, in order to reduce time in negotiations and minimal documentation. Industrial buyers with large-scale projects and multiple spending in a region can obtain cost advantages through bundling of ED services.

Drivers and Constraints

Drivers

• Modular design: Buyers in mature markets demand quicker and less expensive construction, which in turn, stresses the need for modular designs
• Industry consolidation/M&A:The demand for intelligent design, and to solve complex construction, has resulted in the expansion of service portfolios by strategic M&As
• Sustainable design: Sustainable design is of high demand in the market, currently, leading to the rise of niche segments, such as lighting and energy design
• Urbanization: With levels of urbanization to reach 50 percent in APAC and Africa, by 2020 and 2035, respectively, there will be increased consumption of products and services, encouraging various industries to develop their facilities and offices in these economies
• Project Design Time: Increased design complexity and fast-paced projects lead to delays and cost escalations, thus encouraging the use of design tools and techniques

Constraints

• Project funding: Investment in infrastructure projects remains slow, due to political deadlocks, biased politics, and corruption, thereby delaying the projects as a whole
• Recruiting and retaining staff: Skilled workers have left the industry, due to economic downturn. There is an insufficient number of skilled younger workers
• Technology adoption: Poor adoption of BIM/VDC by suppliers and buyers has led to delays in advantageous time and cost estimation methods
• Project execution: In case of ED firm + GC, the GC may face difficulties in taking cost and time advantages in the construction phase.

Market Overview

The engineering industry analysis shows that the KPIs are Predictability of Design, Schedule Variance, Predictability of Design Cost, Committed Cost and Unapproved
Change Orders. The major technology-related engineering industry trends include 3D Laser Scanning, BIM 4D/5D, Augmented Reality, Reprographics, 3D Printing and Construction Robotics. Supplier availability and supplier market maturity are the key factors that influence decision making. In markets where the supplier maturity is high, project owner can transfer the risk to the contractor, based on past experience and capabilities with confidence.

Why You Should Buy This Report

• The report does a detailed analysis of the engineering services market to give the regional market outlook and drivers and constraints for the South America, LATAM, Europe and China markets.
• Porter’s five force analysis of emerging and developed markets.
• Supplier profile and SWOT analysis of major players in the global and regional engineering services market such as Fluor Corporation, Hatch Group, Bechtel Corporation, etc.
• The report does an engineering industry analysis that gives insight on how to market engineering services, top engineering industry trends, best procurement practices, KPIs, end-use industry outlook, etc.