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Companies Deal with Twin Crises Global Design Firms Are Coping with the Impacts of COVID-19 and a Plunge in Oil Prices in an Already Sluggish Market by Gary J

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Companies Deal with Twin Crises Global Design Firms Are Coping with the Impacts of COVID-19 and a Plunge in Oil Prices in an Already Sluggish Market by Gary J Overview p. 52 // International Market Analysis p. 52 // Past Decade’s International Design Revenue p. 52 // International Region Analysis p. 53 // Domestic Staff Hiring p. 53 // International Staff Hiring p. 53 // Profit-Loss p. 53 // 2019 Revenue Totals p. 53 // How Design Firms Shared the 2019 Market p. 54 // Top 10 by Market p. 55 // Top 10 by Region p. 56 Petroleum Market Falters p. 56 // Backlog p. 56 // SSH Designs Huge Maternity Hospital in Kuwait p. 57 // Surbana Jurong: Snowy Mountains 2.0 p. 58 // How To Read the Tables p. 58 // Top 225 International Design Firms List p. 59 Top 225 Index p. 64 // Top 150 Global Design Firms List p. 65 // Top 150 Index p. 68 NUMBER35 TUNNEL VISION Aurecon and Jacobs are designing the $12-billion, 20.5-mile WestConnex underground highway project in Sydney. PHOTO COURTESY OF AURECON OF COURTESY PHOTO The Top 225 International Design Firms Companies Deal With Twin Crises Global design firms are coping with the impacts of COVID-19 and a plunge in oil prices in an already sluggish market By Gary J. Tulacz and Peter Reina enr.com August 3/10, 2020 ENR 51 0803_TIDF_Intro_2.indd 51 7/28/20 2:43 PM THE TOP 225 INTERNATIONAL DESIGN FIRMS 24.2% Transportation $17,488.9 International Market Analysis 20.5% Petroleum 18.7% $14,795.2 Buildings $13,519.6 11.7% Power $8,476.9 6.3% 4.0% 2.6% Water Other $4,559.0 Sewer/Waste $2,871.2 $1,915.0 5.8% 3.4% Industrial 2.2% Hazardous $4,196.5 Manufacturing Waste $ $ 0.7% 1,564.8 2,444.7 Telecom $482.5 Comparing the Past Decade’s International $52.45 $57.67 $65.30 $71.49* $71.35* $70.57* $65.19* $63.87* $64.30* $71.62* 200957.67 201065.30 201171.49* 201271.35* 201370.57* 201465.19* 201563.87* 201664.30* 201771.62* 201872.09* Design Revenue 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (in $ billions) SOURCE: ENR *The 2012-2018 figures are revenue for the Top 200 Design Firms. The expanded 2018 Top 225 list firms had a combined revenue of $71.88 billion. *The 2012-2019 fi gures are revenue for the Top 200 International Design Firms. The expanded 2019 Top 225 list fi rms had a combined revenue of $72.31 billion. The global market for large international design fi rms prise. However, major design firms were quick to has taken a series of hits over the past few years, includ- adopt home working and now see long-term benefi ts ing fl uctuating oil prices, political unrest in many parts in continuing the practice. of the world and the eruption of global trade wars. The industry has “demonstrated a certain amount While many large design fi rms hoped that 2020 would of resilience to at least three or four months’ disrup- provide relief from the disruptions, that was not to be, tion,” says Mike Haigh, chair of U.K.-based Mott as the worldwide COVID-19 pandemic hit and an oil “We were all MacDonald Group. The fi rm quickly shut scores of price war between Saudi Arabia and Russia fl ared up. forced to work global offi ces as “50-60% of our employees shifted These disruptions have left major international design from home, from working in the offi ce to home in a day and a half and this fi rms wondering how to cope with a chaotic market. successful to two days,” he adds. The uncertainty in the market can be seen in the social As an organization with distributed local leader- results of ENR’s Top 225 International Design Firms experiment ship, Systra Group’s head office in Paris provided survey. The leading 225 companies generated $72.31 means that guidelines and support, but “each market took actions billion in design revenue in 2019 from projects outside fi rms need less in accordance with each country’s regulations,” says physical space, home countries, up a scant 0.6% from $71.88 billion can work Andrew McNaughton, senior vice president. In India, in 2018. Part of this weak growth can be attributed to remotely and for example, the 2,000 staffers shifted to home on the absence of Fluor Corp. from the list, which could hire talent “very, very short notice,” he adds. not fi le a survey this year because of U.S. government anywhere in Almost all staff at SNC-Lavalin’s U.K.-based disclosure restrictions on publicly traded companies. the world.” Atkins division were working from home within a Fluor ranked No. 10 on last year’s Top 225 Interna- Ammar Al week, says Philip Hoare, Atkins’ CEO. And Den- tional Design Firms list with $2.13 billion in interna- Hassam, CEO of mark’s COWI had its staff “up and running imme- Dewan tional design revenue. diately,” says Lars-Peter Søbye, CEO. “We saw staff Architects + Engineers getting together and clients accepting the new way Enter the Pandemic of working.” The outbreak of the COVID-19 virus beginning at the At its peak, Sweden’s Sweco AB had some 80% of end of 2019 in China and quickly spreading worldwide its 17,500 employees at home, says Åsa Bergman, took much of the global construction industry by sur- president and CEO. Initially, some clients were uneasy 52 Ⅲ ENR Ⅲ August 3/10, 2020 enr.com 0803_TIDF_Overview.indd 52 7/28/20 3:00 PM WORLEY LTD. acquired Jacobs Energy, Chemicals & Resources in #3 April 2019. Worley’s revenue includes OVERVIEW eight months of ECR’s revenue. International Region Analysis% 25.8 22.2% Europe $18,684.4 21.3% Asia and Australia United States Number of Firms $16,051.6 $15,436.4 Reporting Profit-Loss Domestic Profits 132 131 Domestic Loss 12.9% Middle East International Profit 1.4% 4.8% $9,317.0 International Loss North Africa Latin 20 15 $1,029.6 America 8.2% $3,450.3 0.3% Canada 3.0% $5,907.7 Caribbean Volume (in $ billions) Islands South/Central $164.52 $250.5 Africa Domestic Revenue 0.0% $2,176.1 Arctic and $92.21 International Revenue Antarctic $72.31 Total Revenue $10.5 INCREASE (Measured in Professional 96 Professional 91 firms reporting) Domestic 16 DECREASE International 23 SOURCE: ENR Staff Hiring 60 Staff Hiring 52 STAYED THE SAME about digital working. But within weeks, “everyone become “how we permanently operate in the future.” was up to speed,” she adds. Staff were generally happy “We were all forced to work from home, and this with the practice, which was “very pleasant to see.” 212 successful social experiment means that firms need less of the Top 225 About half the staff are back in their offices, she says. physical space, can work remotely and hire talent any- sent in surveys Design firms’ ability to work remotely will lead to where in the world,” says Ammar Al Hassam, CEO of last year. a “sea change in how the sector operates,” says Hoare. Dewan Architects + Engineers, Dubai. Atkins was already on that path, with 130 people shar- ing 100 desks on average. The firm now is aiming for 56.1% Impact on Markets about 200 people per 100 desks, he adds. increased Most large design firms are seeing a significant down- “We really learned something about ourselves,” says international turn in opportunities as the result of the COVID-19 Haigh of Mott MacDonald. “We demonstrated we re- revenue in pandemic. “We are seeing a dip in large-scale projects, ally can work productively and efficiently from home. 2019. and this could worsen in 2021,” says Heang Fine It’s reinforced my belief in digital investments.” Wong, Group CEO of Surbana Jurong, Singapore. He Prior to the pandemic, many international design says many projects have been shelved, delayed or re- firms were already operating remotely to bring to- 43.9% duced in scope. “But even in these challenging times, gether the best global thinking for clients. Their re- had lower we still have clients relying on us.” sponse to the pandemic has been an acceleration of international Many firms worry that the amount of project in- that transformation. “We have learned that we can revenue in vestments will plummet in both the public and private continue to support our clients and communicate ef- 2019. sectors as a result of large government deficits, eco- fectively without seeing them face-to-face, and our nomic slowdown and a drop in consumer spending. people are continuing to connect, engage with each “This is certainly a significant challenge we will face other, win work and deliver projects,” says Ashley in the near future,” says Jose Luis Manzanares Abasolo, Wright, CEO of Australia’s GHD. CEO of Spain’s AYESA. The response to COVID-19 “means that our way On the other hand, many major European de- of working will never go back to the way it was,” says sign firms have so far shown resilience to the pan- William Cox, CEO of Australia’s Aurecon. He says the demic. As governments plan infrastructure invest- new digital tools and time saved by a lack of travel will ments to reboot their collapsed economies, firms enr.com August 3/10, 2020 ENR 53 0803_TIDF_Overview.indd 53 7/28/20 5:45 PM THE TOP 225 INTERNATIONAL DESIGN FIRMS anticipate an uptick in project opportunities. For Dohwa Engineering in South Korea, sales are “Business was going well … 2019 was a good year up in the second quarter of this year by over 30% from for us,” says Haigh of Mott MacDonald, recalling last year, despite COVID-19.
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