Product Engineering Services
Market, Supplier, Risk and
Competitive Intelligence

Industry Outlook & Drivers

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 the US, several firms are indulging in a 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 benefits developed economies, due to the availability of a low- cost talent pool.

Engineering Services Market Outlook

• The global ED industry was projected to grow at a CAGR of 4–5 percent by 2020. The demand for ED services is driven by infrastructure, facilities management,  residential and industrial sectors, seeking process efficiency in the construction phase.
•  APAC has become an increasingly favorable 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 of 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, especially in APAC with M&As. E.g. Tetra Tech's acquisition of Coffey and Aurecon's merger with AUP.

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 in high demand in the market, currently, leading to the rise of niche segments, such as lighting and energy design, air conditioning and ventilation, and facilities management.
• 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 the 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 the 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, a project owner can transfer the risk to the contractor, based on past experience and capabilities with confidence. With an increasing demand for Integrated Facilities Management as well as all-in-one service providers, there are many mergers in this sector in mature markets. This is enabling one-stop-solution engineering services providers. The talent is also increasingly sourced from emerging economies due to the cost benefits.

Key Innovations And Market Trends

The constant innovation and refinement of the engineering services market are mostly the implementation of Artificial Intelligence and technology solutions to different aspects of the industry. The trending technology implementations are 3D laser scanning, BIM4D/SD, and cloud sharing. The newer innovations are:

• Drones or Unmanned Aerial Vehicles (UAV)
• Autonomous Robots
• Robot brick layers
• Self-healing concrete
• Thermochromic roofs
• Aerogel insulation

Why You Should Buy This Report

• This engineering services report gives an overview of the global engineering services market and the engineering services market trends.
• It also details the engineering services market size and the historical growth of the market with reasons for significant milestones. The report gives a projected growth forecast supported by the reasons for this anticipated growth trajectory.
• 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. The market dynamics vary from region to region. This section gives detailed figures about the market size, market maturity, unique features, import and export countries as well as the forecast for each region.
• Porter’s five forces analysis of emerging and developed markets.
• Procurement is a very important part of any market. The report details all the relevant facts and figures to support procurement decisions. From pricing models to KPIs this report has valuable data.
• The engineering services market is dependent and linked to many other industries. The mining services, hard services, air conditioning and ventilation services, and integrated facilities management verticals and their impact on the engineering services market are described.
• 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. Unique aspects of each player's business model are highlighted for better understanding.
• Innovations or market trends that have the potential to change the engineering services market significantly are also detailed in the report.
• 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.
• The report also gives a snapshot summary of the entire engineering services market highlighting salient points such as market size, high maturity markets, low maturity markets, trends, strategies, KPIs, source countries, prising and trending technology.