MEP Giants revenue jumps $6 billion over last year
The 2018 MEP Giants generated approximately $53.95 billion in gross annual revenue during the previous fiscal year, a marked increase of about $6 billion over last year’s numbers, in which firms generated $47.65 billion. The 2017 MEP Giants firms generated $47.44 billion in gross revenue. This year, the 2018 MEP Giants earned $7.64 billion in mechanical, electrical, plumbing, and fire protection (MEP/FP) engineering design revenue, an increase over 2017 MEP Giants’ revenue of $6.33 billion.
Several companies either joined the list for the first time or returned after an absence in reporting data: Stanley Consultants (No. 35), McKinstry (No. 55), H2M architects + engineers (No. 67), KLH Engineers (No. 87), EEA Consulting Engineers (No. 90), CoreStates Inc. (dba Core States Group, No. 92), Jacob Feinberg Katz & Michaeli Consulting Group (No. 94), Barton Associates Inc. (No. 97), and Advanced Engineering Consultants (No. 99).
As usual, the most movement happened at the bottom third of the list. There were some large shifts at a few firms. Comparing 2017 data against 2018 data, CRB (Clark, Richardson and Biskup Consulting Engineers Inc.) moved from No. 31 to No. 17, CMTA Inc. moved from No. 38 to No. 23, and Morrison Hershfield moved from No. 74 to No. 58. The largest jump up in the list was kW Mission Critical Engineering, ranked at No. 87 in 2017, now at No. 70 in 2018.
The list this year comprises 60% private companies (down from 64% in 2017), 26% employee-owned companies (a slight uptick), 7% limited-liability companies, and 7% public companies. The 2018 MEP Giants are made up of consulting engineering firms (59%) and architectural engineering firms (34%).
A decrease in mergers and acquisitions occurred in the past year; only 14% of firms acquired another company. In 2017, the numbers were a bit different, with 23% of firms acquiring another company in the previous fiscal 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.
More than half (58%) of all 2018 MEP Giants’ revenue is generated from MEP design, with an average MEP design revenue of $76.4 million per firm. This is an increase from the past fiscal year, in which average design revenue was reported at $63.33 million per firm.
Keeping in line with the 2017 MEP Giants one in four of companies reported "staffing: quality of young engineers" as their biggest challenge. In past reports, participants indicated that "the economy’s impact on the construction market" was the greatest challenge, which fell to second place among challenges this year at 12%. Other challenges for 2018 MEP Giants included "evolving information technologies for design or project management" at 11% and "staffing: keeping older engineers trained/current" at 8%.
The people at each firm
The 2018 MEP Giants firms employ 65,655 engineers, up from 61,326 engineers last year. On average, each 2018 MEP Giants firm has 109 mechanical engineers (up from 97 in 2016), 98 electrical engineers (up from 82), 10 plumbing engineers (down from 19), 9 fire protection engineers (up from 8), and 41 environmental engineers (up from 22).
This year’s MEP Giants employ 224,424 people, including all types of staff and job titles (an increase from last year’s staffing total of 196,128 people). For the 2018 MEP Giants, firms averaged 2,244 staff members, both engineering and nonengineering staff.
The engineering staffs of this year’s firms are made up of 15% females (up from 14% last year). On average, 40% of nonengineering staff are female, a slight decrease.
On average, firms had 100 LEED Accredited Professionals (at any level) on their team and 11 commissioning agents or professionals (CxAs or CxPs) on the team.
In 2018, the MEP Giants earned 90% of their MEP design revenue for U.S.-based projects, a small increase from last year (89.5%). Several opportunities are open to MEP Giants outside the United States. Engineering services are provided in North America (Mexico, Canada) 51% of the time (a decrease from 56% last year). Other areas of international revenue include the European Union (27%, also a decrease), Asia (33%, no change), the Middle East (29%, also a decrease), the Caribbean (23%, no change), and South America (16%, also a decrease).
When it comes to sustainable engineering, the number of U.S. Green Building Council LEED projects decreased for this reporting period; 1,372 projects were submitted for LEED certification in the past fiscal year, whereas 1,553 projects were submitted for the previous reporting period. The number of projects submitted in the past fiscal year to the U.S. Environmental Protection Agency’s Energy Star Buildings Label decreased from 308 to 226 projects, with an average of two projects completed by each of the 2018 MEP Giants.
Types of projects
The 100 firms listed here don’t handle all aspects of engineering. Many subcontract specialty services including acoustics (67%), computational fluid dynamics modeling (28%), security system design (20%), and construction management (16%). However, more firms are bringing some specialty services in-house, including technology design, to meet the needs of high-tech integrated buildings.
As shown in Figure 2, MEP Giants indicated that they split their time between new construction (41%, down from 44% last year) and retrofit/renovation (39%, up from 38% last year). These numbers have deviated only slightly year over year, with a percent or two of change each year based on economic conditions. Rounding out the projects are maintenance, repair, and operations (10%); commissioning or retro-commissioning (6%); and "other" (3%). For a more in-depth report on commissioning, read our October 2018 issue on the Commissioning Giants.
The 2018 MEP Giants firms continue to work on several projects in hospitals and health care facilities, office buildings, colleges and universities, and industrial/manufacturing facilities. Figure 3 breaks down the various building types in which MEP Giants firms work; the health care and office building markets were at the top for this reporting period, as they were the past 2 years. Read about several project profiles at www.csemag.com/giants.
Rounding out each firm
Various new questions were introduced in the past couple of years to help provide a broader picture of how the MEP Giants firms are managing their businesses. As a result, we’ve uncovered some interesting facts about the 2018 MEP Giants:
- Many firms have lead engineers or experts who handle a particular focus: business development director (89%, a slight increase over last year), chief electrical engineer (82%, down from 85%), chief mechanical engineer (85%, up from 84%), and commissioning engineer or coordinator (74%, down from 80%).
- New York is once again listed as the No. 1 state that firms call home, with 18% of companies headquartered there. Next on the list: Pennsylvania with 10%.
- In addition to traditional labor and overhead costs, MEP Giants spend capital funds on new tools (such as software or hardware, 28%), capital improvement (such as office space, 17%), and promotions and marketing (16%).
- Private project or building owners remain the No. 1 source of work/clients, with design-build coming in second.
At the beginning of the year, the Consulting-Specifying Engineer (CSE) staff collected and analyzed data from several consulting and engineering firms. Some of the top mechanical, electrical, plumbing, and fire protection (MEP/FP) engineering firms submitted their firms’ profiles to CSE; 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 $5 million, although the smallest firms on this list far exceed that minimum (the smallest amount of MEP design revenue reported this year was more than $10 million).
In 2018, more than 100 engineering firms provided their information for the MEP Giants program, with some newcomers or firms re-entering the program. A tie (No. 55) is unusual, but not unheard of. Data and percentages are based on the top 100 companies that responded to the request for information; the results do not fully represent the construction and engineering market as a whole. However, with nearly identical questions asked in previous years and more than 100 engineering firms participating this year, we present a qualified portrait of where the top engineering firms stand in 2018.