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
Jun 10, 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.
- US construction spending in some specialized heavy and civil engineering construction categories was mixed in April 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 0.5% compared to March 2024, and spending rose 5.7% over April 2023. Spending for Conservation and development projects – such as dams, levies, breakwaters, jetties, and dredging – rose 2.1% in April compared to the previous month but declined 4.6% year-over-year. Amusement and recreation projects – which include parks and tourist camps – experienced a 0.6% drop in construction spending in April compared to March, but spending was up 15.6% from April 2023.
- 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.
- 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.
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