Overview p. 40 // International Market Analysis p. 40 // Past Decade’s International Design Revenue p. 40 // International Region Analysis p. 41 // Domestic Staff Hiring p. 41 // International Staff Hiring p. 41 // Profit-Loss p. 41 // 2016 Revenue Totals p. 41 // How Design Firms Shared the 2016 Market p. 42 // Top 10 by Market p. 43 // Top 10 by Region p. 44 Asian Market Stalls p. 44 // Backlog p. 44 // Homage to the Written Word p. 45 // GHD Is Streamlining Processes p. 46 How To Read the Tables p. 46 // Top 225 International Design Firms List p. 47 // Top 225 Index p. 52 // Top 150 Global Design Firms List p. 53 // Top 150 Index p. 56 AFRICAN JEWEL WL Meinhardt Group Pty. Ltd. has designed the Pinnacle Towers in Nairobi, Kenya. The 45-story tower will be a Hilton Hotel, and the 70-story mixed-use tower will rise 900 ft to become the tallest building in Africa. The project broke ground in May. NUMBER 51 NUMBER PHOTO COURTESY OF WL MEINHARDT GROUP PTY. LTD. WL MEINHARDT GROUP PTY. OF PHOTO COURTESY The Top 225 International Design Firms Oil Sector Slows World Market While the global petroleum market has slumped, many design firms see demographic changes providing opportunities By Gary J. Tulacz and Peter Reina enr.com July 17, 2017 ENR 39 0717_TIDF_Intro_4.indd 39 7/11/17 12:43 PM THE TOP 225 INTERNATIONAL DESIGN FIRMS 23.5% Transportation International Market Analysis $15,041.4 22.4% 18.9% Petroleum Buildings $14,359.4 $12,113.6 11.3% 4.8% Power 3.2% $7,261.7 Industrial 5.8% Manufacturing Sewer/Waste $3,050.6 Other $969.5 $2,040.4 $3,749.8 1.5% 3.1% 4.9% Hazardous Waste Water 0.6% $2,012.1 $3,134.2 Telecom $381.9 (Measured $ millions) SOURCE: ENR. Comparing the Past $ $ Decade’s International $42.99 $52.62 $52.45 $57.67 $65.30 $71.49* $71.35* 70.57* 65.19* $ 2014 2015 63.87* Design Revenue 2007 2008 2009 2010 2011 2012 2013 2016 (in $ billions) SOURCE: ENR * The 2012-2016 figures are revenue for the Top 200 International Design Firms. The expanded 2016 Top 225 list firms had a combined revenue of $64.11 billion. The market for international design has traveled a rocky to $14.36 billion, in 2016. International revenue for the road over the past several years. The slowing growth in sector has now fallen 35.4% from 2014. China’s economy has led to a drop in demand for Firms in the petroleum sector say large projects are commodities, the plunge in oil prices has caused deferrals dwindling. “Many projects have been canceled or or cancelations in major petroleum projects, and global delayed. The current market is expected to be less active,” political and economic unrest has made investments in says Sung Sang-Rok, CEO of South Korea’s Hyundai some regions uncertain. However, shifting demographics “The car fl eet Engineering Co. Ltd. and new demands for infrastructure in underdeveloped in its totality … For WorleyParsons, 70% of its revenue comes from countries have many international design fi rms looking is expected to hydrocarbon work. However, the sector’s few new mega- to a brightening future. double in the projects has had only a limited impact on the fi rm, as The uncertainty in the market can be seen in the next 20 years, much of its work is in smaller projects and in operations from around results of ENR’s Top 225 International Design Firms one billion cars and maintenance, says Andrew Wood, CEO of Australia’s survey. The Top 225 fi rms generated $64.11 billion in today to two WorleyParsons. Further, “within hydrocarbons, we can design revenue in 2016 from projects outside their home billion cars in shift between upstream, midstream [or] downstream as countries, down 2.0%, from $65.43 billion, in 2015 and 2040. This will capital expenditure shifts its emphasis.” 9.5%, from $70.85 billion, in 2014. However, the drive up oil While the demand for oil is not about to dry up, demand.” Top 225 had $79.30 billion in revenue from domestic Wood notes that “the car fl eet in its totality, however, is projects in 2016, up 12.1%, from $70.76 billion, in 2015. Andrew Wood, expected to double in the next 20 years, from around one CEO, On the Top 225 International Design Firms list, fi rms billion cars today to around two billion cars in 2040. This WorleyParsons are ranked based on design revenue from projects outside will drive up oil demand.” He adds, “The increase in of their home countries, measuring their presence in demand for car travel for the middle class, we believe, international commerce. The ENR Top 150 Global will overpower the effects of improving effi ciency and Design Firms list measures total worldwide design the take up of electric vehicles.” revenue, regardless of the project location. The sagging market for petroleum-related projects is Consolidation Continues the main culprit in the global revenue downturn. Inter- Over the past several years, design fi rms have been national revenue from the petroleum sector fell 19.0%, consolidating, leading to the development of an 40 Ⅲ ENR Ⅲ July 17, 2017 enr.com 0717_TIDF_Overview.indd 40 7/11/17 12:46 PM NKY ARCHITECTS AND ENGINEERS is managing design and #97 engineering at 44 sites under the King OVERVIEW Abdullah Project 2 in Saudi Arabia. International Region Analysis 23.7% 21.3% 16.3% Europe Asia and $15,227.1 United States Australia Number of Firms $10,469.9 $13,683.2 Reporting Profit-Loss 18.8% 3.6% 9.1% Middle East 155 Domestic Profits 139 South/Central Canada $12,034.7 Domestic Loss Africa $5,853.9 $2,328.2 International Profit 4.5% 32 39 International Loss 2.2% Latin North Africa America $ $1,429.7 2,883.7 0.3% Volume (in $ billions) Caribbean $143.42 Islands Domestic Revenue $203.6 0.0% International Revenue Arctic and $79.30 Antarctic $64.11 Total Revenue $0.8 Increase Professional 93 Professional 81 (Measured in Domestic 42 International 43 Decrease firms reporting) SOURCE: ENR Staff Hiring 63 Staff Hiring 65 Stayed the same increasing number of megafirms. This trend is gies as MWH brings a global footprint in geographies continuing this month with Canada’s SNC-Lavalin where the combined companies can now offer a more Group Inc.’s absorption of U.K.-based W.S Atkins Plc, 197 diverse scope of services to local communities,” says Alan of the Top 225 raising the combined workforce to over 50,000. “It’s Krause, Stantec’s global operations president. sent in surveys very much business as usual,” says Heath Drewett, now The trend toward mergers and acquisitions also can last year. Atkins’s president. Having achieved the goal of an 8% be seen in Asia. Surbana Jurong Pvt. Ltd. of Singapore margin last year, the focus is now on growth, he adds. acquired Australia’s SMEC in August 2016, expanding In the design sector, “consolidation will definitely con- 46.2% its global workforce to 9,800 employees in more than tinue,” says Lars-Peter Søbye, president and CEO of increased 95 offices across 40 countries. Denmark’s COWI AS. COWI seeks to make up for its international Surbana Jurong also has launched a series of joint relatively small size by being in the top three in selected revenue in ventures. On May 25, it announced a new joint venture regions and core business lines. Søbye plans to grow sales 2016. with Safdie Architects, Boston. To be called Safdie by 25%, to $1.1 billion, over the next three years. Surbana Jurong (SSJ), it will pursue major residential, “This … will be a year of consolidation,” says Tomas commercial and institutional projects in Asia, says Carlsson, CEO of Sweden’s Sweco AB, which acquired 53.3% Wong Heang Fine, group CEO of Surbana Jurong. In Netherlands-based Grontmij in 2015. Yet with a head had lower March, Surbana Jurong formed a joint venture with count of about 16,000 now, “we are looking for acquisi- international China Highway Engineering Consulting Corp., a tions all over northern Europe,” he adds. revenue in design subsidiary of China Communications Construc- With some 6,000 staff worldwide, Paris-based 2016. tion Group, to provide design services for highway and SYSTRA Group is relatively small, but “if we are looking municipal projects, says Wong. for specific expertise, we can second people from the In another move by a Chinese firm, JSTI Inc. last shareholder,” says COO Andrew McNaughton. France’s September acquired EPTISA, a Spanish engineering state railroad company, SNCF, and the Paris region mass- firm that works in more than 45 countries around the transit authority, RATP, each owns 42% of the firm. world, and TestAmerica, which is the largest third-party The acquisition of MWH Global by Canada’s Stantec environmental testing firm in the U.S., with 23 testing has expanded the firm’s reach. “The integration of MWH laboratories and more than 40 customer service centers, into the Stantec network continues to demonstrate syner- according to Allen Li, JTSI president. “These two enr.com July 17, 2017 ENR 41 0717_TIDF_Overview.indd 41 7/11/17 12:46 PM THE TOP 225 INTERNATIONAL DESIGN FIRMS M&As brought material changes to the international Increasing demand for better infrastructure is boosting business and layout of JSTI,” expanding the fi rm’s global prospects for international fi rms. Water and wastewater footprint to nearly 3,500 overseas employees, Li says.