Engineering Services
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 46,000 engineering services firms in the US provide evaluation, investigation, planning, design, and development services related to utilities, structures, buildings, machines, equipment, processes, or systems. Specialty areas include civil, mechanical, industrial, electrical, electronics, computer hardware, aerospace, environmental, chemical, health and safety, materials, petroleum, nuclear, and biomedical engineering. Firms work on specific projects for clients and must be adept at project planning and management.
Dependence on Highly Skilled Personnel
Engineering service firms rely on a highly-educated, professional workforce.
Liability
Work site hazards and the complexity and scale of engineering projects expose engineering services firms to liability.
Industry size & Structure
A typical engineering services firm operates out of a single location, employs 25 workers and generates around 6.6 million in annual revenue.
- The engineering services industry consists of about 46,000 companies that employ over 1 million workers and generate $303 billion annually.
- Customer industries include general building, transportation, petroleum, power, hazardous waste, water, sewer/waste, industrial, and manufacturing.
- The engineering services industry is fragmented: The 50 largest firms account for only about 35% of industry revenue.
- Large companies include Fluor, Bechtel, and AECOM.
Industry Forecast
Engineering Services Industry Growth
Recent Developments
Jun 28, 2024 - Low Grade for US Infrastructure
- Midway through the five-year spending plan under the Infrastructure Investment and Jobs Act (IIJA), only about 38% of the funding has been announced, according to Construction Dive. So far, of the $1.2 trillion in spending authorized by the IIJA, about $454 billion in project spending has been announced. Of spending announced to date, bridges and roads have accounted for the largest share, followed by rail, broadband, power, and water, according to CNBC analysis of data released by the White House. However, some industry insiders suggest more spending is required to upgrade and repair the US’s aging infrastructure. In a recent report, the American Society of Civil Engineers (ASCE) gave US infrastructure the grade of “C minus” and rated US roads, bridges, airports, and water systems as being in “poor” to “mediocre” condition.
- The Associated Builders and Contractors (ABC) Construction Backlog Indicator fell 0.1 months to 8.3 months in May compared to April. Backlogs were down 0.6 months compared to May 2023’s 8.9 months. The infrastructure segment saw the biggest drop in May as backlogs slipped to 8 months compared to 9.8 months in April. The heavy industrial backlog rose by 1.3 months, and the commercial and institutional backlog was flat. The ABC’s Construction Confidence Index for sales rose to 59.9 in May from 59.7 in April. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said, “Over a year has passed since the Federal Reserve raised the target range of the federal funds rate above 5%. Despite widespread expectations that rates will remain elevated through at least the end of the year, contractors remain confident about the future.”
- Maintaining existing wastewater, stormwater, and other US water infrastructure over the next 20 years is expected to cost more than $630 billion, according to a recent report given to Congress by the EPA. The EPA’s Clean Watersheds Needs Survey is based on reports by states and territories projecting the costs to maintain public wastewater facilities, stormwater infrastructure, and decentralized water treatment systems, such as septic tanks. The Infrastructure Investment and Jobs Act (IIJA) provides some funding for wastewater upgrades, but some infrastructure experts suggest the IIJA doesn’t come close to meeting the future funding needs of US wastewater systems.
- Federal investigations into the collapse of Baltimore’s Francis Scott Key Bridge after it was struck by a containership hope to discover the cause of the accident but also how infrastructure could be better protected from similar events. In speaking at a hearing by the US House Committee on Transportation and Infrastructure about the federal response to the disaster, US Coast Guard Vice Admiral Peter Gautier said the ever-increasing size of containerships is “placing greater demands on marine transportation infrastructure that may not have kept pace with increased risks that these vessels may pose.” In the wake if the collapse of the Key Bridge, the National Transportation and Safety Board (NTSB) is examining pier-protection upgrades on other bridges that suffered similar collisions but didn’t collapse.
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