Environment Analyst also projects a flat market for 2015.
Although it makes for “somber reading,” it’s not all bad news, says Liz Trew, co-author of the report. Environment Analysts projects the global EC market will reach $30.5 billion in the next five years — up 10.7 percent on its 2014 value — reflecting a downgrading of growth expected from the emerging economies.
“There are still specific segments and markets that are still growing — it is a highly complex and fragmented industry, with green legislation the key underlying driving force,” Trew told Environmental Leader. “The UK EC sector, for instance, is now seeing moderate growth post-recession — in the region of 4 percent per year — on the back of a strong infrastructure pipeline and housebuilding recovery. Demand within the EIA and ecology sectors have been particularly strong here over the last couple of years. It seems that the firms who are most successful tend to be those who are more specialized in focus, and those able to respond quickly to the changing conditions and clients’ demands with innovative cost-effective solutions.”
The analysis found 23 companies are leading the global environmental consulting (EC) sector, together accounting for 44 percent of the total $27.5 billion market.
The top 10 players, ranked by gross global EC revenues in 2014, are: AECOM, CH2M, Tetra Tech, Arcadis, Environmental Resources Management (ERM), Golder Associates, AMEC Foster Wheeler, Ramboll Environ, and WSP | Parsons Brinckerhoff and GHD in joint ninth place.
According to the report, AECOM benefits from a top-three positioning in three major regions: North America, Asia-Pacific and East Europe/FSU.
Matthew Sutton, chief executive, AECOM Global Environmental Business says AECOM expects to continue to grow in 2016.
“We’re doing so by diversifying and building technical depth in our service offering to targeted key global and regional clients,” Sutton told Environmental Leader. “Our vision for 2016 calls for continued investment in our people, our clients, technology and in delivery excellence. Our growth plan includes delivering full environmental services across the AECOM enterprise and its vision to design, build, finance and operate leading projects around the world.”
According to the report, the next 13 are: Grontmij (bought by Sweco in 2015); Antea Group, Cardno and RPS Group (in joint 12th position); MWH Global; Jacobs; Mott MacDonald, Royal HaskoningDHV and WorleyParsons (in joint 16th place), ICF International, SLR, Atkins and Coffey International (soon to be owned by Tetra Tech).
While the market saw a slight dip in 2013, it further tanked in 2014. The report attributes this deterioration to the slowdown in demand from key client sectors such as the US federal government and international mining and oil & gas industries.
“Remember this is a global study,” Liz Trew, co-author of the report says. “So given the sheer size of the North American market, accounting for over the half the total market, it has been massively impacted by the Obama administration’s cuts to the DOE and DoD’s budgets as many of the large US players are heavily reliant on large federal contracts. And of course governments elsewhere are still constrained in their spending. In addition, the global mining and oil and gas sectors have softened considerably as a result of the commodities downturn, which in turn has seen lower growth than anticipated in emerging markets such as South America, Asia Pacific, and Africa and the Middle East.”
The Global 23 peer group of EC practices saw a 6.2 percent decline in their combined revenues.
Together the environmental consultancy practices of the Global 23 claim a combined share of 44 percent of the total global market in 2014. Only the top three players — AECOM, CH2M and Tetra Tech —boast overall market shares in excess of 4.5 percent, largely thanks to their strong positions in the dominant North American region, which accounts for 52 percent of the total market.