The UK environmental consultancy (EC) sector grew 5.2 percent in 2013, to stand at £1,401 million ($2244 million), according to the latest report from business intelligence and market research firm Environment Analyst.
This follows a similar level of growth in 2012 (+5.1 percent) and 2.3 percent growth in 2011, after two consecutive years of significant declines in the wake of recession (see Figure 1).
With this continued growth trend, the UK market is set to surpass its 2008 pre-recession peak of £1,479 million ($2371 million) and is on course to grow by about 5 percent once again in 2014.
In addition to the UK economic recovery — and in particular the return to growth of the house-building sector — increased investment in national infrastructure projects has played a big part in the market’s bounce back, the report says. Steps taken during the years of recession to export the skills of British-based environmental consultancy talent to overseas projects and markets have also been a positive driver. In 2013, the report finds that international projects (outside of the UK) accounted for 11.6% of the UK EC revenue total for the Top 34 UK environmental consultancy practices.
However, growth across the sector has been far from uniform with government spending cuts continuing to hamper the recovery. In 2013, there was a 1.7 percent contraction in EC revenues from public sector commissioning bodies to stand at £339 million ($543 million), equivalent to 24.2 percent of the total market, although this is an improvement compared to the declines of 2.4 percent in 2012 and 8.4 percent in 2011.
Of the Top 34 players, those most dependent on government-sourced contracts are Halcrow/CH2M Hill, Atkins, Ricardo-AEA, Jacobs and Mott Macdonald (ranked according to their segmental market shares in 2013).
However, the public sector decline was more than offset by increased spend from within the private sector and regulated industries, which together saw a solid growth rate of 7.6 percent in 2013 to reach £1,062 million ($1,701 million), equivalent to 75.8 percent of the total UK EC market.
The UK survey echoes am Environmental Analyst report published earlier this year that found environmental consulting firms are finally rebounding from the global economic slowdown, which started in 2008.