MEP Giants continue to diversify
The 2014 MEP Giants revenue has remained flat, while firms continue to diversify the services they offer and the building types they work in.
The 2014 MEP Giants generated approximately $39.5 billion in gross annual revenue during the previous fiscal year and $6.38 billion in mechanical, electrical, plumbing (MEP), and fire protection engineering design revenue. There is very little difference from the 2013 MEP Giants numbers, indicating a relatively flat 2013 fiscal year.
Several new firms joined the list for the first time this year: SmithGroupJJR (No. 24), AHA Consulting Engineers Inc. (No. 51), Burns Engineering Inc. (No. 52), KCI Technologies Inc. (No. 66), Skidmore, Owings & Merrill LLP (No. 73), Wiley|Wilson (No. 74), Integrated Design Group (No. 78), Southland Industries Engineering (No. 81), JBA Consulting Engineers (No. 98), and CASCO Diversified Corp. (tied at No. 100).
A variety of firms that did not report data or did not qualify based on their revenue last year returned to the 2014 MEP Giants list: AECOM Technology Corp. (No. 3), EwingCole (No. 36), CMTA Consulting Engineers (No. 55), Korda/Nemeth Engineering Inc. (No. 91), The Rock Brook Consulting Group PA (No. 95), and Rolf Jensen & Assocs. Inc. (tied at No. 100).
A couple of firms opted not to participate in the 2014 MEP Giants, particularly URS Corp. (No. 3 in 2013) and WSP (No. 12 in 2013), which lowered both the gross annual revenue and MEP design revenue for this year.
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. Total gross revenue and MEP design billings remained relatively flat, though that’s likely due to a few top firms not reporting data. As seen last year, about two-thirds (64%) of all firms’ revenue is generated from MEP design, with an average MEP design revenue of $62.5 million.
Participants again indicated that “the economy’s impact on the construction market” is the greatest challenge (63%, which is down from 71% last year). According to data from the research firm FMI, there are areas of growth for construction put in place (CPIP) predicted for the near future. According to the report, lodging will see a 9.8% and 9.6% increase in 2014 and 2015, respectively. Manufacturing will see a 6.5% and 6.7% increase over the same time period; health care will see a 3.9% and 5.5% increase over the same two years. The compound average growth rate over the next four years (through 2017) will be 7.5% for lodging, 6.9% for manufacturing, and 6.7% for health care.
Engineering employment increases
The 2014 MEP Giants firms employ 62,742 engineers, up from slightly more than 60,000 in 2013 and 55,000 in 2012. Engineers in the mechanical, electrical, plumbing, and fire protection fields accounted for 18,800 engineers, down slightly from nearly 20,500 in 2013. As shown in Figure 1, we’ve accounted for environmental engineers in this year’s breakdown, as that sector continues to grow. Mechanical and electrical engineers continue to hold the top two spots—nearly evenly—among all engineers reported.
Several opportunities are open to MEP Giants outside the United States and North America while the U.S.-based construction market continues to recover. Areas of growth include the Middle East (42% of firms are providing services), Asia (41%), South America (28%), Europe (27%), and the Caribbean (24%).
When it comes to sustainable engineering, the number of U.S. Green Building Council LEED projects dropped significantly for this reporting period; 1312 projects were submitted for LEED certification last year. This is a dramatic difference from past years—2285 projects were submitted for LEED certification in 2013, 2214 in 2012, and 2365 in 2011. The number of projects submitted in the past fiscal year to the U.S. EPA Energy Star Buildings Label program ticked up slightly—448 projects were submitted, as compared to 401 submitted in 2013 and 414 submitted in 2012.
Types of projects
The 100 firms listed here don’t handle all aspects of engineering. Many subcontract specialty services, including: acoustics (65%), security system design (24%), computational fluid dynamics modeling (25%), and construction management (18%). Two of these specialty services decreased in percentage subcontracted: security system design dropped from 30% last year (a 6% decrease) and construction management dropped from 25% last year (a 7% decrease).
As shown in Figure 2, MEP Giants indicated that they evenly split their time between new construction (42%) and retrofit/renovation (41%). These numbers have not deviated from past years. Rounding out the projects are maintenance, repair, and operations (8%); commissioning or retro-commissioning (7%); and other (2%). For a more in-depth report on commissioning, read the October 2014 issue on the Commissioning Giants.
The 2014 MEP Giants firms continue to work on several projects in hospitals, data centers, offices, and schools. Figure 3 breaks down the various building types the MEP Giants work in; the health care and college/university markets were at the top for this reporting period. Read about several project profiles in a special interactive display at www.csemag.com/giants.
Technology and education
Like other businesses, engineering firms keep up with various technologies, especially software and design tools. All firms report using the following tools: computer-aided design (CAD) and building information modeling (BIM). Other tools used are Revit MEP (98%), energy analysis software (96%), and project management and collaboration software (93%).
According to the 2014 MEP Giants data, when asked, “What educational and mentoring programs does your firm offer its engineering staff?” the results were as follows. Any change from last year’s numbers is indicated after each item.
98% allow their engineers to attend webcasts during business hours (increase)
98% purchase e-learning courses/materials for their engineers (increase)
98% offer formal mentoring (increase)
97% offer paid membership to societies (decrease)
94% offer paid attendance to conferences/trade shows (decrease)
91% offer tuition reimbursement (increase)
80% offer paid training and testing (decrease)
73% offer informal internal mentoring (decrease).
At the beginning of the year, the Consulting-Specifying Engineer (CSE) staff collected and analyzed data from more than 100 consulting and engineering firms. Some of the top mechanical, electrical, plumbing (MEP), and fire protection engineering firms submitted their firm’s profile to the CSE staff; however, not all consulting firms were willing or able to participate in this year’s MEP Giants survey. The minimum MEP design revenue required for consideration is $1 million, though the smallest firms on this list far exceed that minimum.
In 2014, more than 100 engineering firms provided their information for the MEP Giants program, with a few newcomers. A tie for No. 100 is unusual—especially among three firms. Data and percentages are based on the top 102 companies that responded to the request for information; the results do not fully represent the construction and engineering market as whole. However, with nearly identical questions asked in previous years and more than 100 engineering firms participating this year, we present a qualified look of where the top engineering firms stand in 2014.