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
Dec 9, 2024 - Construction Opportunities, Challenges for 2025
- Construction industry economists and other experts outlined the potential opportunities and challenges the sector faces in 2025 during a November webcast hosted by construction software firm ConstructConnect. Moderating inflation is a key tailwind for the construction sector, as prices for most inputs have fallen. Lead times for many products have also dropped, except for certain types of electrical equipment. Construction industry observers also anticipate the incoming Trump administration will curb regulations, which could speed up project starts. However, Donald Trump’s plan to implement tariffs could increase prices for construction inputs and possibly spark a trade war. The Trump administration is also expected to be less supportive of projects funded through Biden-era programs, including the Infrastructure Investment and Jobs Act, the Chips and Science Act, and the Inflation Reduction Act. The construction sector also lacks enough workers, a condition that could worsen amid a Trump crackdown on immigration.
- According to a White House fact sheet released in mid-November, only 47% of the $1.7 trillion in funding through 2021’s Infrastructure Investment and Jobs Act (IIJA) has been announced. The Biden administration is working to get the remaining dollars allocated before Donald Trump takes office, according to AP News. While some Biden administration officials worried that Trump could scale back or eliminate some Biden-era spending, pulling back IIJA funding could be difficult. The IIJA has benefitted many Republican-leaning states and districts, according to the Global Infrastructure Investment Association. Some industry observers doubt there will be any significant effort to pull back infrastructure spending.
- Spending related to transportation projects - including rail, airports, and ports – is projected to rise 4% in 2025, 5% in 2026, and 4% in 2027 and 2028, according to FMI’s fourth-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 rise by 1% per year in 2025 and 2026, then increase by 4% in 2027 and 6% in 2028. Investments in dams, levees, dredging, and coastal and intercoastal conservation will be among the main drivers of conservation and development spending. Storm-hardening projects in the Southeast to protect newly constructed manufacturing and trade infrastructure facilities will also boost conservation spending.
- 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 jumped 16% in 2023 and are expected to moderate to 8.8% growth for 2024, according to Inforum and the Interindustry Economic Research Fund, Inc. The industry is forecast to post sales growth of 6.1% in 2025, then notch average annual growth of about 4.4% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
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