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2014-Enr-Top-500-Design-Firms.Pdf Overview p. 2 // Profitability p. 2 // Top 500 Volume p. 2 // Backlog p. 2 // Past Decade’s Design Revenue p. 2 Markets’ Share of Total Revenue p. 3 // Domestic and International Staff Hiring p. 3 // International Market Analysis p. 4 WHPacific Scans the Horizon p. 5 // Top 20 Design Firms by Sector p. 6-8 // Top 50 Designers in International Markets p. 9 // Top 100 Pure Designers p. 10 // Protecting the Grid p. 11 // Top 500 Dialogue p. 12 Power Engineers Flying High p. 13 // Top 500 Design Firms List p. 14 // Where To Find the Top 500 p. 24 NUMBER36 WINNING ENTRY Dubai has been selected to host the 2020 World Expo, thanks, in part, to HOK’s expo master plan, which includes the central pavilion, called Al Wasl. RENDERING CCOURTESY OF HOK OF CCOURTESY RENDERING A Recovery in Need of Speed The industry recession is slowly fading to a bad memory, but design firms are finding a changed landscape in the marketBy Gary J. Tulacz enr.com April 21/28, 2014 ENR 1 THE TOP 500 DESIGN FIRMS OVERVIEW 2013-2014 at a Glance Number of Firms Volume (in $ billions) Number of Firms Reporting Profitability Reporting Size of Backlog 92.7 Total Revenue 440 Domestic Revenue 304 Domestic Profits International Revenue Higher Domestic Losses Lower International Profits 64.1 Same International Losses 138 28.6 85 54 49 17 Comparing the Past Decade’s $53.0 $59.3 $69.6 $80.6 $90.6 $80.0 $79.8 $85.1 $90.2 $92.7 Design Revenue 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (in $ billions) Source: McGraw Hill Construction ENR. The design profession has been hit hard over the past also was down in 2013, dropping 1.8%. Transportation six years. By some estimates, as many as 40% of archi- was a bright spot in the U.S. market, rising 7.5%, to tects were unemployed during the height of the reces- $14.31 billion, fueled by a series of megaprojects. sion, in 2009. Engineers fared better but not by much. AECOM once again topped ENR’s Top 500 Everybody did more with less. Now, after several fits Design Firms list, where it has reigned for the past five and starts over the past few years, the market finally is years. In a major development, Michael S. Burke was in recovery mode. It’s no bull market, but strength is “I see a slight named CEO on March 6, 2014, and continues as pres- building. Still, many “lean and mean” project delivery acceleration in ident. Burke succeeds John M. Dionisio, who becomes methods born of the recession remain in place. the market, but executive chairman of the firm. we shouldn’t This slow recovery can be seen in the data from expect a Jacobs moved up to No. 2 on the list, powered by ENR’s Top 500 Design Firms list. Taken as a group, snap-back a series of major acquisitions over the past three years. the Top 500 firms had design revenue of $92.69 billion recovery.” In 2011, Jacobs acquired Aker Solutions’ process-and- in 2013, up 2.7% from $90.24 billion in 2012. This George Pierson, construction business, which consists of approximately marks the third consecutive year the Top 500 experi- CEO, Parsons 4,500 employees in the metals and mining markets. It enced revenue growth since the recession began. Brinckerhoff also acquired KlingStubbins, a 500-person architect- Market growth was modest on the domestic side. engineer based in Philadelphia. The Top 500 did see a 3.7% gain, to $64.13 billion, in Industry consolidation continued apace in 2013. revenue from projects in the U.S. in 2013, from $61.86 CB&I acquired Baton Rouge, La.-based Shaw Group billion in 2012. This figure still has not reached the in February 2013. Shaw ranked at No. 13 on last record $68.14 billion in domestic design revenue gen- year’s Top 500. Conestoga-Rovers & Associates, Ni- erated in 2008. The international market was even agara Falls, N.Y., which ranked at No. 33 on last softer: Revenue from projects outside the U.S. rose year’s Top 500, declined to participate in this year’s only 0.6%, to $28.55 billion, in 2013. survey as it was in the process of being acquired by Domestically, public-sector markets did not fare Australia’s GHD. And Jacobs acquired Houston- well. Revenue from water-supply projects fell 5.6% in based Eagleton Engineering LLC, which ranked at 2013 from 2012, and revenue from sewer and waste No. 198 last year. projects fell 5.1%. Hazardous-waste project revenue “We continue to see large-scale industry consolida- enr.com April 21/28, 2014 ENR 2 THE TOP 500 DESIGN FIRMS OVERVIEW Markets’ Share of Total Revenue 20.5% Petroleum Transportation General $17,836.75 $18,627.57 Building 19.2% 20.1% $18,972.86 4.3% Water $5,331.18 Other 4.9% 5.1% 5.8% % $3,970.60 Industrial % 1.0 Sewer 7.2 Power Telecom $4,510.54 Manufacturing and Waste Hazardous $9,205.14 $931.98 $1,912.36 $4,724.04 Waste 9.9% 2.1% $6,662.01 (Measured $ millions) Source: McGraw Hill Construction ENR. Professional 300 Professional 73 Increase (Measured in Domestic International Decrease 63 15 firms reporting) Staff Hiring Staff Hiring 109 100 Stayed the Same Source: McGraw Hill Construction ENR tion through mergers and acquisitions and are watch- The Drive Toward Alternate Delivery ing that trend carefully,” says Greg Graves, CEO of 468 For some firms, the transportation market is thriving. Burns & McDonnell. “We have done a couple of small Top 500 firms “Transportation is solid for us, to a great extent because acquisitions in recent years but still believe the best that sent in we are in the large-project market,” says Robert Slimp, path for [us] is through organic growth.” surveys last CEO of HNTB Corp. He cites projects such as the Many firms are making acquisitions to “buy into year. Bay Area Rapid Transit Warm Springs extension proj- markets,” says Chris Vincze, CEO of TRC Cos. He ect in California, the Crenshaw-LAX Transit Corridor cites as examples the U.K.’s WSP acquiring Alberta, Project in Los Angeles and the $2-billion state Route Canada-based Focus Group Holdings, a 1,700-person 69.9% 99 Tunnel Project in Seattle. engineering firm, on March 12, and Australia’s Cardno Saw revenue Slimp says many major projects now have multiple Ltd. acquiring Houston-based PPI Group, a 760- increases funding streams, such as tolling or public-private person firm, on March 17. “Both the acquired firms between 2012 partnerships. “P3s are growing, and the states now were in the oil-and-gas sector,” he notes. Vincze says and 2013. authorizing them should be commended.” TRC also is on the acquisition trail. “We are growing However, many public transportation agencies both internally and through acquisition. We have continue to experience budget uncertainties. To make acquired eight companies in the past three years.” 29.9% up for funding shortfalls, more states are resorting to Overall, the market is recovering, but many firms Saw revenue alternate project delivery. “We see alternative funding are hoping for a more robust recovery. However, most declines sources continuing to be the norm at all levels of gov- firms are not expecting a sudden surge in activity. “I between 2012 ernment,” says L. Joe Boyer, CEO, Atkins North see a slight acceleration in the market, but we shouldn’t and 2013. America. He says he expects a recovery in the housing expect a snap-back recovery,” says George Pierson, market that will generate more tax revenue, which will CEO of Parsons Brinckerhoff. allow an increase in funding for municipal infrastruc- Pierson says a more robust recovery may not be ture projects. good for the industry, citing the potential for spikes in “Design-build and P3s, as alternative delivery materials prices and possible labor shortages. “Plus, if methods, are changing the landscape of transportation the recovery is too quick, we risk another sudden engineering,” says Mark Acuff, president of ICA downturn,” he says. Engineering. He says the effort to deliver projects enr.com April 21/28, 2014 ENR 3 THE TOP 500 DESIGN FIRMS OVERVIEW International Market Analysis Asia and Canada Australia $7,164.77 $8,869.65 Genlser (No. 20) % 21.0% Domestic Market 10.7 is the architect 25.1% 31.1% Revenue: $64.1 Middle Europe and Thornton East $5,997.59 Tomasetti (No.69.2 % International Market $3,060.04 85) is the % Revenue: $28.5 7.9 engineer on the Latin America 30.82,073-ft% tall and Caribbean Shanghai Tower, 0.1% 4.1% $2,249.88 which is Arctic/ Africa scheduled to be Antarctic $1,183.55 completed later $25.17 this year. (Measured $ millions) (Measured $ millions) Source: McGraw-Hill Construction ENR Source: McGraw Hill Construction ENR more efficiently is a trend “that is rightfully challeng- With the scramble by clients for funding alterna- ing the traditional design-bid-build industry.” Acuff tives, some larger firms are getting more actively in- says design firms will be successful if they can maintain volved in assisting them in securing project financing. separate relationships with the client and the contrac- “We’re noticing an uptick, especially in the United tor but also work as a team with both. States, of clients who are looking to engineering and However, alternate project delivery is having an construction firms for guidance on financing for proj- impact on smaller infrastructure design firms.
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