SHREWSBURY, U.K. — The value of the global environmental consultancy (EC) market reached US$27.4 billion (£16.7bn) in 2012, up 3.6 percent over the previous year, according to the latest report by Environment Analyst. The sector still is growing ahead of global economic growth, which stood at 3.2 percent in 2012. The top 10 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 12 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.
Together, the environmental consultancy practices of the ‘Global 22’ claim a combined share of 43.7 percent of the total global market in 2012, up from 41.1 percent in 2011. But only the top two players — CH2M Hill and Tetra Tech Inc — are able to boast overall market shares in excess of 5 percent.
The peer group has outperformed the market as a whole, growing aggregate EC revenues by 6.1 percent in 2012 through a combination of acquisitive growth (c1.1 percent) and organic growth (c5.0 percent). This marks the third consecutive year of growth following a 2.4 percent contraction in EC sales in 2009 at the height of the economic downturn, and then a post-GFC bounce-back of 12.8 percent increase in 2010 and 9.9 percent in 2011.
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 internationalization, often in line with multinational clients, continues to re-shape the industry.
"Overall however, we see that many of the leading global players within this field are not only recovering from the impact of the global financial crisis and ongoing government austerity programs but also responding to and, in some cases, thriving in challenging conditions.”
In many cases, strategic growth plans for the Global 22 continue to center on the resource-led economies of Asia-Pacific, Latin America, Africa and the Middle East, with these regions currently attracting significant levels of investment. However, demand has slackened in the Asia-Pacific region, with the growth here slowing to just 2 percent in 2012 compared to 7 percent in 2011. This in part reflects the constrained Australian mining sector and deceleration of China’s economy and therefore demand for commodities.
Based on the service area breakdown of the Global 22’s aggregated EC revenues, Environment Analyst finds 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 percent in total, ahead of the 24 percent share held by water and waste management. Environmental impact assessment & sustainable development takes a further 17 percent while environmental management, compliance and due diligence services represent just over 15 percent. Climate change & energy related services generated a further 9.4 percent 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 customer sectors assessed in the report, with a total 29 percent share. Moving into the number one spot, energy & utilities now account for just over 30 percent of the total. Mining, manufacturing and process industries take a further 25 percent while clients operating within the construction, property and transportation sectors were the source of 10 percent of the total EC market spend last year. Financial, professional and service sector clients accounted for approaching 4 percent.
According to the study, the global EC market is forecast to reach $31.7 billion (£19.3bn) by 2017. 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 percent 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 percent in the next five-year period, while EIA and sustainable development spend will increase by almost 17 percent.”