Prosperity is expanding the borders of the world construction market. The North American market boom has been well documented, but the Middle East now is growing despite regional tensions, thanks largely to the upswing in oil prices. Asia has been holding steady at a high level of activity. The huge European market, which largely has been static, is showing signs of recovery, led by Eastern European work. And Latin America also is stirring, thanks to rising prices for copper and other commodities, which has mining work flourishing.
Overall, ENR’s Top 200 International Design Firms had a big year in 2005. Revenue from projects outside the firms’ home countries rose to $26.31 billion in 2005, up 8.9% from $24.16 billion in 2004. The big gainers on a regional basis were the Middle East at $2.43 billion in 2005, up 48.9% over 2004, and Canada at $1.55 billion, up 29.0%. Other gainers include the U.S., up 10.7% to $2.76 billion; Latin America and the Caribbean, up 9.4% to $1.51 billion; and Europe, up 6.8% to $7.44 billion. Asia was flat, increasing only 0.1% to $6.07 billion, while Africa fell 16.5% to $2.11 billion.
The international market in general is booming. “It’s a good time to be in the international consulting business,” says Kevin Stovell, business development director of the U.K.’s Mott MacDonald group. “There is more good quality work than most people can handle with the resources they have,” adds Keith Clarke, chief executive officer of WS Atkins plc.
Private financing is raising demands on the quality design firms deliver, says David Odgers, CEO of AECOM Global. With contractors investing their own cash, the cliche that ‘good engineering wins jobs’ is well founded, he says.
THE 2006 TOP 200 AT A GLANCE
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But for many firms, good design is not enough. Design firms are trying to move up the food chain to more lucrative management consulting. “In the past, front-end skills [were] essentially technical. Now, clients are looking at both technical and management skills,” says Stovell.
One firm that is pushing its management skills as well as its design expertise is New Zealand’s Opus International. “We are expanding in the U.K., Canada and Australia as these countries have similar needs, particularly in the area of infrastructure asset management,” says Kevin Thompson, CEO. He says that
the skills and innovative solutions that have worked in managing New Zealand’s infrastructure are “readily acceptable and transportable to these countries.” Opus currently is working on the Piccadilly Line infrastructure in the U.K., and highways development and asset maintenance in western Australia and Canada. Opus also is finding a growing international market for water resource and wastewater management.
One of the big issues in the world market is rising oil prices, which not only is fueling new petroleum work, but also providing new impetus for alternative fuel programs in such sectors as the power market. For example, Australia’s SMEC International is seeing major growth in private hydropower and in renewable energy, including solar and geothermal, says Ross Hitt, managing director of SMEC’s international group.
The trend to alternative energy also has helped Germany’s Lahmeyer International have a “very successful year,” says managing director Henning Nothdurft. The firm has 20,000 MW of hydro plants at various stages on its books, says Egon Failer, a director. “A few years ago, a very big project would have been 1,000 MW. Nowadays, that’s average.”
Demand for renewable energy rose 25% for Lahmeyer and its thermal business also is booming, says director Thomas Kraneis. In June, Lahmeyer signed a design management contract for 2,800 MW of thermal capacity at eight Nigerian plants worth $3.6 billion.
On a regional basis, China continues to be the strongest, as well as the largest, of the Asian markets. “We are seeing good, solid growth,” says Odgers. With over 600 staff, AECOM’s Chinese business is working on urban planning for local clients and doing engineering for overseas investors.
Another buoyant sector in China is high-rise design, notes Craig Gibbons, a Hong Kong director of Arup Group Ltd. He is getting more inquiries from developers and architects from the U.K., U.S. and particularly China about projects in that...