Engineering Services Market

Engineering Services Market Outlook (2022-2032)

The global engineering services market is valued at US$ 707 billion at present and is forecast to become a trillion-dollar industry by 2032, expanding at a CAGR of 5.9% between 2022 and 2032. 

Offering a spectrum of engineering services spread across a plethora of industry verticals, this fast-growing industry accounted for around 5% share of all enterprise professional services.

Report Attributes	Details
Engineering Services Market Size (2021A)	US$ 670 Billion
Estimated Market Value (2022E)	US$ 707.5 Billion
Forecasted Market Value (2032F)	US$ 1,220 Billion
Global Market Growth Rate (2022-2032)	5.6% CAGR
North America Market Share (2021)	~38%
East Asia Market Growth Rate (2022-2032)	~6.5% CAGR
United States Market Growth Rate (2022-2032)	~5.6% CAGR
Market Share of Top 5 Companies	~7%
Key Companies Profiled	AECOM Affiliated Engineers Inc AKF Group LLC Arcadis Arora Engineers Arup Burns & McDonnell CJL Engineering Coffman Engineers ESD IMEG Corp. Integral Group Interface Engineering Jensen Hughes Kimley-Horn Loring Consulting Engineers M & E Consulting Engineers Magnusson Klemencic Associates Martin/Martin Consulting Engineers Mott MacDonald RMF Engineering Smith Seckman Reid Stantec Terracon Consultants Tetra Tech High Performance Buildings Group Vanderweil Engineers Walter P Moore WSP USA

Economic Activity Diversification Creating Incremental Demand for Engineering Services

Infrastructure development is not just an indicator of economic growth but also for supporting economic activity. Engineering service firms provide design, planning, and consulting for infrastructure development such as highways, bridges, tunnels, water sources, and others. With rising investments in infrastructure development worldwide, demand for engineering service outsourcing is projected to rise at a significant rate over the coming years.

• As per the International Transport Forum, investments in inland infrastructure as a percentage of GDP varied from 0.2% to 5.8%. China accounts for a leading percentage of 5.8%, and Mexico with the least percentage of 0.2%.

As such, increasing investments in infrastructure development across the world are expected to drive market growth over the studied period.

• Short Term (2022-2025): Post-COVID there has been an increase in infrastructure development, industrial building, manufacturing plants, and others. This factor will result in significant growth of the engineering consulting services market.
• Medium Term (2025-2028): Developing economies such as China, India, and others from the Asia Pacific region account for a substantial share of infrastructure development. Therefore, the market will see potential growth opportunities in way of expansion among developing economies.
• Long Term (2028-2032): Globally, infrastructure development is expected to rise during this period. Along with growing population & urbanization, it may lead to an increase in the automotive, aircraft, and building sectors, which is expected to create potential opportunities for market growth.

The global engineering services market expanded at a CAGR of 5.2% between 2017 and 2021, according to Fact.MR, a market research and competitive intelligence provider. As per the analysis, the market is projected to progress further at a 5.6% CAGR through 2032.

Market share analysis of engineering services based on service and region. Under the service segment, construction management services dominate with 23% market share in 2022.

What’s Driving Demand for Engineering Services?

“Continuous Development of Smart Cities”

Smart city development is a trend in both developed and developing economies. The growing development of smart cities worldwide is a major factor stimulating the demand for engineering services.

• For instance, according to a study by the Consumer Technology Association, smart city spending would reach US$ 35.35 billion by the end of the decade from US$ 14.85 billion in 2015.

Engineering service corporations are essential facilitators of the global vision through updating infrastructure to include sensing technology and data analytics focused on updating infrastructure to include sensing technology and data analytics. Therefore, the development of smart cities and new investments in industry expansion in China, India, and Indonesia will boost the demand for engineering and design services.

“Rapid Adoption of Advanced Technologies”

Modern construction, design, and engineering projects have become extremely complex these days and require engineers for essential inputs from vivid backgrounds along with advanced technologies like artificial intelligence, the internet of things, and IT solutions such as engineering analytics.

These technologies are beneficial in solving complex design issues and addressing the right solutions adequately to offer increased productivity and help in smart decision-making. Owing to such factors, demand for engineering services is expected to see significant growth in managing the complex connected infrastructure. Moreover, these technologies minimize the errors associated with the development of products and infrastructure and enhance business efficiency.

What Can Challenge the Growth of the Engineering Services Market?

“Lack of Skilled Professionals – A Market Dampener”

A large number of graduate engineers worldwide lack the skills required by the client, which is restraining the market growth. Since, the utility of advanced technologies such as mobile technologies, Artificial Intelligence, data engineering, and machine learning are in trend. However, only 3% of engineers possess the skills in these areas.

It has been found that 25% of engineers graduating from Indian engineering schools are of high quality, while 80%-85% of young people lack the skills necessary for any profession. Additionally, the engineering and industrial sectors were negatively impacted by COVID-19, with roughly 85% of employees experiencing a skills shortage in 2020.

Country-wise Insights

Asia Pacific Governments’ Move towards Infrastructure Development Drive Demand for Engineering Consulting Services

The Asia Pacific (East Asia & South Asia & Oceania) engineering services market holds 23% share of the global market at present.

Favorable government initiative toward the development of economic infrastructure coupled with an increasing level of urbanization in the Asia Pacific region is one of the major factors driving the growth of the market.

• For instance, in 2021, the Civil Aviation Administration of China recorded 248 civil airports in 2021, and water transportation infrastructure will see tremendous growth in its coastal and inland river ports with 2,207 and 452 berths of 10,000 tons deadweight and above, respectively.

With an average yearly urbanization rate of 3%, East Asia and the Pacific is the region in the world that is urbanizing the fastest. Such elements are anticipated to fuel market growth for engineering services in the Asia Pacific region.

India’s Engineering Service Market to Be Highly Lucrative

The Indian government places a strong emphasis on infrastructure development because it is crucial to the country’s overall growth. It is trying to ensure that world-class infrastructure is built across the country on schedule. Power plants, bridges, dams, highways, and urban infrastructure development, all come under the infrastructure sector.

• Through its "National Infrastructure Pipeline," India intends to invest US$ 1.4 trillion in infrastructure over the next five years. Infrastructure-related operations made up around 13% of the US$ 81.72 billion in total FDI inflows in FY21.

Also, the government is making investments in the aviation sector to increase international trade and fuel market growth. India intends to launch 1,000 new connections connecting the nation's smaller cities and villages by opening 100 extra airports by 2024. Such development activities will boost the building of infrastructure in the area, favorably affecting the market for engineering services.

The Indian engineering service market is expected to grow at a CAGR of 6.2% through 2032.

Category-wise Insights

Construction Management Services to Be in High Demand

Rising urbanization and population growth are impacting the construction of buildings, rail structures, tunnels, bridges, and others. This factor is driving the demand for engineering consulting services in the construction industry.

Planning and designing is an essential part of construction projects offered by engineering service providers to ensure the proper amalgamation of the design and construction process. Whereas, surging renovation activities with the increasing demand to protract the life of structures are expected to stimulate segment growth over the decade.

The construction management segment accounts for a share of 23% of the global engineering service market.

Industrial Sector to Hold Leading Share in Global Market

The industrial sector is projected to account for a leading share of 21% in the global engineering services market.

Development of the industrial sector requires professionals and experts from various disciplines, which is projected to stimulate the demand for engineering consultants. With increArdurra Groupasing digitalization across different sectors, the industrial sector has seen the tremendous utility of smart technologies in various processes such as crushing, tunneling, blasting, and others.

Competitive Landscape

Prominent engineering service providers are AECOM, Affiliated Engineers Inc, AKF Group LLC, Arcadis, Arora Engineers, Arup, Burns & McDonnell, CJL Engineering, Coffman Engineers, ESD, IMEG Corp., Integral Group, Interface Engineering, Jensen Hughes, Kimley-Horn, Loring Consulting Engineers, M & E Consulting Engineers, Magnusson Klemencic Associates, Martin/Martin Consulting Engineers, Mott MacDonald, RMF Engineering, Smith Seckman Reid, Stantec, Terracon Consultants, Tetra Tech High Performance Buildings Group, Vanderweil Engineers, Walter P Moore, and WSP USA.

The competitive intensity in the global engineering consortium consulting market is high with the presence of various new and established players in the market. Strategic moves by these market players, such as acquisitions, mergers, and partnerships are being implemented to upscale their presence among end users.

• In November 2021, Ardurra Group, a consulting and engineering services firm, acquired and merged with Ritoch-Powell & Associates, which is a civil engineering firm. The aim behind this initiative was to enhance the company’s service offerings and global footprint.
• In October 2021, Ransom Consulting, an environmental & engineering firm, acquired Civalier Engineering & Surveying, Inc. Through this acquisition, Ranson expanded to six new offices across the New England and Atlantic region.
• In October 2019, Balfour Beatty, an infrastructure group, signed a partnership agreement with the North Carolina Department of Transportation (NCDOT) to upgrade traffic on a 5.1-mile stretch of U.S. 70 in James City in Craven County. This project is outlined to enhance local community services and improve economic development in the area.

Fact.MR has provided detailed information about the providers of engineering services positioned across regions, sales growth, and service offering expansion, in the recently published report.

Segmentation of Engineering Services Industry Survey

• By Service :

  • Construction Management Services
  • Transportation and Traffic Engineering
  • Municipal Engineering/Land Development
  • Bridge Inspections and Engineering
  • Enterprise Architecture
  • Aircraft Modification & Certification
  • Manufacturing Engineering

• By Functional Area :

  • System Engineering and Process Engineering Support
  • Modeling, Simulation
  • Prototyping, Pre-Production, Model-Making, and Fabrication Support
  • System Design Documentation and Technical Data Support
  • Software Engineering, Development, Programming, and Network Support
  • Reliability, Maintainability, and Availability (RM&A) Support
  • Human Factors, Performance, and Usability Engineering Support
  • System Safety Engineering Support
  • Configuration Management (CM) Support
  • Quality Assurance (QA) Support
  • Information System (IS) Development, Information Assurance (IA), and Information Technology (IT) Support
  • Interoperability, Test and Evaluation, Trials Support
  • Measurement Facilities, Range, and Instrumentation Support
  • Supply and Provisioning Support
  • Training Support
  • In-Service Engineering, Fleet Introduction, Installation Support
  • Others

• By End-use Industry :

  • Industrial
  • Aerospace & Defense
  • Automotive
  • Energy & Power
  • Healthcare
  • Oil & Gas
  • Construction
  • Government & Public

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • MEA