Specialized Heavy and Civil Engineering Construction
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,400 specialized heavy and civil engineering construction firms engage in a broad range of non-residential construction work. Major project categories include mass transit (railroads, subways); marine construction (dredging, navigational channels, locks, docks); tunnels; outdoor recreational areas (athletic fields, parks, trails, golf courses, campgrounds); conservation and development (dams, drainage canals, flood control); and harbor and port facilities.
Uneven, Seasonal Demand
Demand for specialized heavy and civil engineering construction services is uneven and seasonal.
Dependence on Government Funding
Demand for specialized heavy and civil engineering construction services is driven by public construction projects, which rely on government funding.
Industry size & Structure
The average specialized heavy and civil engineering construction company operates out of a single location, employs about 18 workers, and generates $5.5 million in annual revenue.
- The specialized heavy and civil engineering construction industry consists of about 4,400 firms that employ almost 79,000 workers, and generate over $23 billion in annual revenue.
- The industry is concentrated at the top and fragmented at the bottom. The top 50 companies account for about 48% of industry revenue.
- Large firms include Herzog Contracting (rail), Railworks, Railroad Construction Company, Orion Group Holdings (water resources), and Great Lakes Dredge & Dock Corporation (water resources).
- The US is a “closed” market for dredging with government regulations restricting dredging operations in US waters to US-owned and operated vessels staffed by US crews.
Industry Forecast
Specialized Heavy and Civil Engineering Construction Industry Growth
Recent Developments
Aug 9, 2024 - Transportation Construction Spending to Rise
- Spending related to transportation projects - including rail, airports, and ports – is projected to rise 3% in 2024, 7% in 2025, 9% in 2026, 5% in 2027, and 3% in 2028, according to FMI’s third-quarter 2024 North American Engineering and Construction Outlook. Airport spending will outpace rail and port expenditures amid an anticipated doubling of air passenger and cargo volumes before 2040. Construction spending for conservation and development projects is expected to drop by about 2% in 2024 as Infrastructure Investment and Jobs Act funding awarded in 2022 and 2023 levels off. Conservation and development funding will then decline 2% in 2025 and 2026 before rising 3% in 2027 and 5% in 2028. Investments in dams, levees, dredging, and coastal and intercoastal conservation will be among the main drivers of conservation and development spending through 2028.
- The specialized heavy and civil engineering construction industry is expected to experience flat but steady sales growth in the coming years. The industry’s year-over-year sales increased by 5.9% in 2021 and 12.4% in 2022 before dropping to 5.2% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to fall to 4.6% in 2024, then rise to 4.9% in 2025. The industry will then see flat but steady average annual growth of about 4.9% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- With growth of 28%, public safety will lead 2024 nonresidential building construction, followed by manufacturing (21%), educational (7%), and religious (7%). Commercial construction spending is expected to decline 7% in 2024 amid weaker demand for warehousing space, high interest rates, and tighter lending standards. Lodging construction spending is forecast to drop 6%, and stubbornly high office vacancies will continue to weigh on new office construction, which is projected to see flat spending in 2024. Despite high interest rates, single-family construction spending is forecast to rise 7% in 2024 as homebuilders reduce home sizes to improve affordability. Spending for multifamily is expected to decline by 1% in 2024 after projects in development peaked at 1 million units in mid-2023. At 9% growth, water supply will lead 2024 growth in the infrastructure sector, followed by highway and street (+8%), power (+8%), and sewage and waste disposal (+8%).
- US construction spending in some specialized heavy and civil engineering construction categories increased in June 2024, according to the US Census Bureau. Transportation projects – which include cargo and passenger rail, dry docks, marinas, and marine terminals – saw spending increase by 0.4% compared to May 2023, and spending rose 3.3% over June 2023. Spending for Conservation and development projects – such as dams, levies, breakwaters, jetties, and dredging – rose 5.4% in June compared to the previous month and increased 4.5% year-over-year. Amusement and recreation projects – which include parks and tourist camps – experienced a 0.6% rise in construction spending in June compared to May, and spending was up 4.2% from June 2023.
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