Global enviro consulting sector up 4% to reach $27.4bn
Top 22 players assessed by Environment Analyst account for increasing proportion of global market, at 44% in 2012
The global environmental consultancy (EC) market saw a 3.6% increase in 2012, to reach US$27.4 billion (£16.7bn), according to the latest research by Environment Analyst presented in our newly-released Global Environmental Consulting Strategies and Competitor Analysis 2013 (http://environment-analyst.com/global) report.
The growth recorded in 2012 is marginally down on the 4.1% figure for the previous year, and is expected to be squeezed again in 2013, to 3.1%, reflecting the slight dampening of global economic forecasts. According to the study, the global EC market is forecast to reach $31.7 billion (£19.3 billion) by 2017.
The fully updated and further extended version of the report, now in its third year, provides a comprehensive picture of the current state of the global EC sector and competitive landscape through detailed company profiles and statistics from the most geographically diverse and globally ambitious companies operating in the EC sector. The latest edition, issued in December 2013, includes two new profiled consultancies (Cardno and ICF International), bringing to 22 the number of global environmental consultancy players featured in the report.
The top ten firms ranked in terms of gross global EC revenues are: CH2M Hill, Tetra Tech Inc, URS Corporation, Golder Associates, AECOM, Environmental Resources Management (ERM), Arcadis, AMEC Environment & Infrastructure, MWH Global and Cardno. The next twelve are: Grontmij NV, RPS Group, SKM Consulting, ENVIRON, WorleyParsons, WSP Environment and Energy/GENIVAR, Parsons Brinckerhoff, ICF International, Mott MacDonald, ATKINS, SLR and Coffey International (see global map for top three firms in each region).
Global 22 achieve 6% growth
Together, the environmental consultancy practices of these firms accounted for an combined share of 43.7% of the total global market in 2012, up from 41.1% in 2011. However, only the top two players – CH2M Hill and Tetra Tech Inc – are able to boast overall market shares in excess of 5%. Together, the ‘Global 22’ have outperformed the market as a whole, growing their aggregate EC revenues by 6.1% in 2012 through a combination of acquisitive and organic growth, against 3.6% for the total market. This marks the third consecutive year of growth for the Top 22 – albeit at a slower growth rate in 2012 compared to the 9.9% and 12.8% bounce-back in aggregated EC sales in 2011 and 2010 respectively – following a 2.4% contraction in EC sales in 2009 at the height of the global economic downturn.
Ten of the Global 22 managed to grow their individual market shares in 2012, including market leader CH2M Hill, while nine saw their shares remain stable. Three companies saw an erosion of their market position.
Editor of Environment Analyst’s Global Market Intelligence Service and co-author of the report Liz Trew comments: “The economic regional disparities worldwide have forced the sector to be both more responsive and adaptable to often uncertain and fast-developing market conditions within their home markets and overseas. Geographic diversity remains the buzzword and globalisation, often in line with multinational clients, continues to re-shape the industry.
“Overall however, we see that many of the leading players within this field are not only recovering from the impact of the global financial crisis and ongoing government austerity programmes but also responding to and, in some cases, thriving in challenging conditions.”
Asia-Pacific growth slows
In many cases, strategic growth plans for the Global 22 remain focused on the resource-led economies of Asia-Pacific, Latin America, Africa and the Middle East, with these regions continuing to attract significant levels of investment. Nevertheless, North America remains the market’s biggest regional market by far, accounting for a dominant 58% of the total market, considerably ahead of West Europe and Asia-Pacific both with around 15%. Africa & Middle East, Latin America and East Europe/FSU all take 5% or less.
However, demand from Asia-Pacific was found to have softened considerably, with the regional market growth slowing to just 2% in 2012 compared to 7% in 2011. This in part reflects the constrained Australian mining sector and deceleration of China’s economy and therefore demand for commodities.
Contaminated land/remediation: the biggest work area
Based on the service area breakdown of the Global 22’s aggregated EC revenues, Environment Analyst finds that contaminated land services have overtaken water and waste management services as the largest single service area within the global EC market in 2012, representing some 29% in total, ahead of the 24% share held by water and waste management. Environmental impact assessment & sustainable development takes a further 17% whilst environmental management, compliance and due diligence services represent just over 15%. Climate change & energy related services generated a further 9.4% of the total.
In terms of the client profile of the Global 22 EC firms, depressed demand triggered by austerity measures across many of the largest and most mature markets have pushed governments and regulators into the second largest spending sector of the five major sectors assessed in the report, with a total 29% share. Inching into the number one spot energy & utilities now account for just over 30% of the total. Mining, manufacturing and process industries take a further 25% whilst clients operating within the construction, property and transportation sectors were the source of 10% of the total EC market spend last year. Financial, professional and service sector clients accounted for approaching 4%.
Commenting on future growth prospects for the global EC market, Liz Trew said: “Although our forecast model projection for the global market is for a fairly modest compound annual growth rate of 3.0% over the next five years, this nevertheless equates to an additional £4.3 billion in EC revenues being added by 2017. However, we expect many of the largest companies to supercede this level of growth as they have done so historically.
“Moreover, future growth will be highly sector- and region-specific, with spend on climate change and energy services set to grow by over 35% in the next five-year period, while EIA and sustainable development spend will increase by almost 17%.”
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