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 4,300 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 4,300 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
Apr 9, 2024 - Steady but Flat Industry Growth
- 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 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.
- Increased government investments in tunnel projects, including federal dollars, are expected to keep tunnel construction and engineering firms busy. According to Tunnel Business Magazine (TBM), about $18.9 billion in tunnel-related projects are underway, and another $75.5 billion in projects are in development. However, TBM notes that some dollar figures include project funding that isn’t directly related to tunnel projects. The US Department of Transportation’s (DOT) Federal Railroad Administration has announced $16.4 billion in funding for 25 passenger rail projects in the Northeast Corridor. Several local and regional water authorities are investing in water and wastewater tunneling projects to support water supply and climate resiliency. Combined sewer overflow projects are underway in St. Louis, Cleveland, Indianapolis, Washington DC, Newark, New Hampshire, and southern Nevada. Harris County, Texas (Houston) officials are exploring an extensive tunnel system to protect against flooding. Planners in Boston and the Sacramento-San Joaquin region are considering drinking water system resiliency projects.
- US spending for conservation and development projects is expected to rise 9% in 2024, reaching a value of $13 billion, according to FMI’s second-quarter 2024 North American Engineering and Construction Outlook. Population growth and government spending are helping to fuel investments in conservation and development projects. In 2024 and 2025, conservation and development projects will see funding of $25 billion through the Infrastructure Investments and Jobs Act (IIJA) and the Inflation Reduction Act (IRA). Those dollars will fund conservation and development initiatives over the next several years, including coastal and intercoastal waterway conservation, and dredging. However, conservation and development spending is forecast to moderate to -2% growth in 2026 and -3% in 2027 before leveling to flat growth in 2028.
- While merger and acquisitions (M&A) activity in the engineering and construction (E&C) sector continues to face challenges in 2024 - including high interest rates and overall economic uncertainty - opportunities remain, especially in certain well-positioned pockets of the E&C sector, according to a recent report by PwC. Much of the commercial real estate sector faces ongoing headwinds, including sluggish project demand, looming refinances, and weak office occupancy. However, firms with exposure to the infrastructure market - particularly in areas including transportation, engineering services, and power and telecommunications – are increasingly attractive to investors.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.