Let’s get the bad news out of the way first: revenue for ENR’s Top 200 environmental firms dropped 4% in 2003 to $31.4 billion. Among the market sectors, water work numbers shrank the most—a $725-million contraction representing an 11% drop. Other sector declines include air (-11%), nuclear (-10%), wastewater treatment (-8%) and hazardous waste (3%).

The two sectors that recorded positive revenue movement during 2003 were environmental management, up 17% to just over $2 billion, and environmental science, up 6% to slightly under $2 billion. But those increases may be misleading since $1.1 billion has flowed out of the undesignated “Other” category and largely into these two categories as companies have become more specific in their allocation of market revenue.

The 2004 Top 200 at a Glance
Major Sectors Fail To Keep Pace
Total Revenue by Market Share
Top 200: International Work
Top 200: The List
Top 200: Subsidiaries List
Top 200: Alphabetical List

Companies and analysts offer many explanations for the second consecutive annual decline after seven years of market expansion. Convention holds that firms in the cleanup business are the last to slide into an economic downturn and the last to rebound in a recovery. So the national economic rebound recovery that by most accounts started gaining momentum last year is just now taking hold in the environmental sector.

Some point to three years of environmental rollbacks under President George W. Bush, or at least the perception that there is scant attention paid to environmental matters in a post-9/11 world. “Those of us in the environmental arena get all the political heat you can imagine,” says a senior executive with a major firm involved in large-scale cleanups at former federal nuclear production sites. “And we have a President who doesn’t know the way to the Forrestal Building.”

NEW DAY The consensus is that the market turned in 2003. The picture is brighter already. (Photo courtesy of Montgomery Watson Harza)

The Forrestal Building houses the Dept. of Energy. It is 1.1 miles southeast of the White House, across the Mall. The U.S. Environmental Protection Agency headquarters building is even closer, less than a half-mile down Pennsylvania Ave. But the epicenter of national priorities lies somewhere beyond Baghdad, companies say.

“There seems to be a general inability to formulate a national consensus on environmental matters,” says Craig Goehring, CEO of Brown and Caldwell. The consulting engineer boosted environmental revenue by 8% last year, but still slipped two notches to No. 34.

So far, the firm is on track to “a 9% year,” says Goehring. Two-thirds of the portfolio comes from state and local sources, with major water and wastewater projects under way across the country. High-profile projects include design work with Hazen & Sawyer (No. 52) on egg-shaped digesters at Washington, D.C.’s Blue Plains wastewater treatment plant expansion; design with CH2M Hill Cos. (No. 3) on King County, Wash.’s Brightwater treatment plant; and programmatic work for the Orange County (Calif.) Sanitation District’s combined sewer overflow plan.


The work flow would be even better if there were more coordination at the federal level, Goehring says. “It’s difficult when there are different approaches at the EPA regional level on the same issue.” He cites recent debates over a number of wet-weather discharge issues: blending secondary and primary effluent, disinfection by-products and CMOM (capacity, management, operations and management). The issues are complex and worthy of debate, says Goehring. But without federal leadership, “we won’t be able to mount much of an effort. As budgets recover, the dollars will go somewhere else where the lobbying effort is more organized,” he claims. “Transportation, for instance.”

Major changes are under way at the very top of the list. U.S. Filter once again led runner-up Bechtel by a wide margin. But revenue fell by a third from a record...