MEP Giants revenue, mergers, diversification increase
The 2015 MEP Giants revenue ticked up slightly, while firms continue to diversify the services they offer, the countries in which they work, and project types.
The 2015 MEP Giants generated approximately $41.9 billion in gross annual revenue during the previous fiscal year, a 6.3% increase from 2014 in which the firms generated $39.5 billion in gross revenue. This year, the MEP Giants earned $6.86 billion in mechanical, electrical, plumbing (MEP), and fire protection engineering design revenue, a 7.4% increase over 2014 revenue.
Several firms either joined the list for the first time or returned to reporting data for the list this year: CRB Consulting Engineers Inc. (No. 12), JENSEN HUGHES Inc. (No. 13), Glumac (No. 19), Jaros, Baum & Bolles (No. 20), Bury (No. 22), TTG Engineers (No. 31), Robert Derector Assocs. (No. 35), Alfa Tech (No. 52), Michaud Cooley Erickson (No. 62), Morrison Hershfield (No. 71), BSA LifeStructures (No. 74), BRPH (No. 85), RTM Engineering Consultants LLC (No. 87), Peter Basso Assocs. Inc. (No. 89), and MKK Consulting Engineers Inc. (No. 95)
A couple of larger firms opted not to participate in the 2015 MEP Giants, particularly Buro Happold Consulting Engineers (No. 14 in 2014) and EYP Architecture & Engineering (No. 26 in 2014), which lowered both the gross annual revenue and MEP design revenue for this year. Several mergers and acquisitions occurred in the past year (21% of respondents acquired a firm), changing the name and face of many companies and moving some firms up the list due to a larger combined revenue (see "2014 biggest year yet for mergers, acquisitions").
Table 1 shows the top firms based on MEP design revenue, which is how the MEP Giants are ranked. Table 2 shows the top MEP Giants firms based on total gross revenue. The complete table of rankings is provided at www.csemag.com/giants.
As seen last year, about two-thirds (64%) of all 2015 MEP Giants’ revenue is generated from MEP design, with an average MEP design revenue of $68.6 million per firm, an increase of 9.6% over 2014.
Participants indicated that "the economy’s impact on the construction market" is the greatest challenge, though the challenge has decreased dramatically year over year. In 2015, 35% indicated that the economy was the biggest corporate challenge; in 2014, 63% of firms reported the economy as the biggest challenge. A major shift in responses about "staffing: quality of young engineers" occurred, with only 18% reporting it as a challenge in 2014 and 26% reporting it as a challenge in 2015. Staffing, succession planning, and recruiting will continue to be issues at engineering firms over the next several years, with no real end in sight as baby boomers retire and the number of engineers graduating from colleges and universities remains flat. This was addressed in the July 2015 editorial viewpoint, "A free way to help young engineers."
MEP engineering employment increases
The 2015 MEP Giants firms employ 63,251 engineers, up slightly from 2014. Engineers in the mechanical, electrical, plumbing, and fire protection fields accounted for 19,174 employees, up slightly from nearly 18,800 in 2014. As shown in Figure 1, we’ve accounted for environmental engineers once again, as that sector continues to grow. Mechanical and electrical engineers continue to hold the top two spots—nearly evenly—among all engineers reported.
In 2015, the MEP Giants earned 82% of their MEP design revenue for U.S.-based projects. Several opportunities are open to MEP Giants outside the United States and North America while the U.S.-based construction market continues to recover and grow modestly. Areas of growth include the Middle East (41% of firms are providing services), Asia (40%), the Caribbean (33%), South America (26%), and the European Union (24%). The biggest jumps in international revenue occurred in the Caribbean and Eastern Africa, with revenue in each region increasing by 40.3% over last year’s design revenue.
When it comes to sustainable engineering, the number of U.S. Green Building Council LEED projects increased slightly for this reporting period; 1,463 projects were submitted for LEED certification in 2015, and 1,312 projects were submitted in 2014 (an 11.5% increase). This is a drop from past years—2,285 projects were submitted for LEED certification in 2013, 2,214 in 2012, and 2,365 in 2011. The number of projects submitted in the past fiscal year to the U.S. EPA Energy Star Buildings Label dropped by 31%—only 310 projects were submitted in 2015, whereas 448 projects were submitted in 2014. This indicates that either firms have chosen not to report these numbers or certifications have lost their luster among building clients.