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The engineering services market size is projected to increase by USD 397.82 million, at a CAGR of 4.39% between 2023 and 2028. The growth rate of the market depends on several factors, including the deploying engineering services reduces overhead costs, the increasing adoption of industrial automation, and the delegation of ancillary tasks enabling focus on core competencies.
The market growth and forecasting report includes key player's detailed analyses of the competitive landscape of the market and information about 20 market companies, including, Babcock International Group Plc, Balfour Beatty Plc, Bechtel Corp., Brasfield and Gorrie LLC, Capgemini Service SAS, CIMIC Group Ltd., Cyient Ltd., Design Systems Inc., EMCOR Group Inc., Fluor Corp., Infosys Ltd., Jacobs Solutions Inc., Kiewit Corp., KKR BOSE DESIGN SERVICES Pvt. Ltd., Tata Consultancy Services Ltd., TRIPLAN India Pvt. Ltd., Virtuoso Projects and Engineers Pvt Ltd, and NV5 Global Inc. . Additionally, AECOM company offers engineering services and collaborate with planners, architects, consultants, program managers and construction managers to deliver high performance buildings, infrastructure and communities.
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Delegation of ancillary tasks enabling focus on core competencies is the key factor driving market growth. Engineering services provide support and knowledge to various complex projects across industries. This helps end-user industries in assigning their core tasks to their enterprise resources to drive higher operational efficiencies. In addition, engineering services provide opportunities and flexibility to end-users to use resources such as engineering and sourcing only when the need arises. This further optimizes the end users' overall investment. As a result, buyers can focus on their core competencies rather than on other ancillary tasks that may not result in complete productivity and return on investment (ROI).
Furthermore, the engineering services employ efficient process control to increase cost efficiency. As a result, buyers can entirely focus on their core functionality to increase profit and productivity. This delegation of auxiliary tasks to engineering service providers will reduce the cost and efforts that end-users require to manage, maintain, and sustain projects. This will primarily drive the growth of the market during the forecast period.
A key factor shaping the market growth is the growing adoption of artificial intelligence. There is an increasing adoption of artificial intelligence (AI) technology in order to resolve large-scale, complex, and critical problems related to engineering development and design due to the significant development of automated systems and processes. Aligning with market trends and analysis, AI plays a crucial role in automation as it removes much of the repetitive and logical labor work included in engineering design and helps organizations reduce up to a third of their operational costs.
Furthermore, these tools allow enterprises to make fast and accurate design and engineering decisions and minimize development time, labor costs, and time to market. As the manufacturing sector generates a high volume of data due to the implementation of advanced software and IT systems, such as manufacturing execution systems, programmable logic controllers, and supervisory control and data acquisition (SCADA) systems, ML can be applied to these data to transform the data into key insights. Hence, such factors are expected to drive market growth during the forecast period.
Shortage of expertise and skilled labor is a significant challenge that affects market growth. As technical know-how is a pivotal asset of engineering services companies, any lack or over-dependency on it acts as a significant challenge to the market. Effective delivery of engineering services needs the personnel to be extensively trained in specialized solutions. Extensive training requires significant investments. Any lack of expert resources leads to functional inadequacies for the market player. This may adversely impact their brand equity and competitive advantage.
However, there is a lack of expert professionals from many disciplines of engineering specialties. This will essentially make the training and development of recruits difficult. Furthermore, the penetration of innovative technology is expected to hinder market growth due to the veteran workforce of companies may be resistant to training on new and emerging technologies to stay relevant in the market. Therefore, the shortage of expertise and skilled labor is expected to impede the market growth barrier during the forecast period.
The automotive segment will be significant during the forecast period. Due to the emergence of disrupting trends such as carpooling provision from taxi service providers, Uber, Ola, and Lyft; and advancement in technologies such as connected cars and automatic driving systems., several automotive manufacturers are under immense pressure to keep up with the evolving market. Additionally, there is an increasing focus on extensive product development and research and development (R and D) due to the increasing consumer demand for car safety, reliability, and performance.
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The automotive segment showed a gradual increase in the market share of USD 295.68 million in 2018. Additionally, there is a growing need for design services using computer-aided design (CAD), paint services, assembly, and other manufacturing services in the market. Furthermore, there is a rise in the number of electric vehicles on the road as there is increasing adoption of EVs as consumers are preferring environmentally friendly commute solutions to contribute less to global climate change due to the lower carbon footprint. Moreover, the new stringent rules are regulations are forcing automotive manufacturers to adhere to stringent quality and regulatory standards while minimizing overall costs. Hence, such factors are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.
Value-based partnerships between customer organizations and outsourced ESPs are fuelling the offshore segment which will increase the market growth. Offshore outsourcing can be defined as the relocation of part or whole of the engineering processes to a different organization in another country or international location. Factors such as the availability of cost-effective resources as well as the abundant availability of skilled and talented human resources globally are fuelling the growth of this segment. Furthermore, there is increasing growth in the offshore segment in several regions of North America as well as Europe and Asia when compared to the onshore segment due to the global inflation rate, training costs, high churn rates, and a rising preference for outsourcing. Hence, such factors will fuel the growth of this segment which in turn will drive the market growth during the forecast period.
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North America is estimated to contribute 34% to the growth of the global market during the forecast period.
Technavio's analysts have provided extensive insight into the market forecast, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. Some of the key factors that are significantly contributing to the growth of the market in North America are favorable government policies, the increasing rate of adoption of advanced technology across sectors, and the high presence of engineering services providers in the region. As a result, there is a significant increase in R&D and business expansion in North America.
Additionally, some of the major industries where engineering service providers offer solutions include oil and gas, mining and metallurgy, construction, and aerospace and defense. Furthermore, the automotive sector is expected to fuel the growth of engineering services growth in the region due to the rise in the number of automotive plants across the US. Hence, such factors are expected to drive market growth in the region during the forecast period.
The market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
The market is experiencing robust growth driven by the increasing demand for product engineering, process engineering, and automation-related services. With a surge in infrastructure demand, companies seek value-added services encompassing asset management and specialized skills to execute complex infrastructure projects. Innovation thrives in this sector, fueled by the integration of digital technologies such as AI (Artificial Intelligence), IoT (Internet of Things), and cloud computing into architectural design and project execution. However, challenges persist, including political insecurity, changes in government, and evolving laws and regulations, alongside geopolitical conflicts impacting project continuity.
Amidst these challenges, the focus on sustainability remains paramount, driving initiatives towards energy-efficient buildings, circular economy projects, and the adoption of renewable energy solutions. Supply chain interruptions pose additional hurdles, yet the Engineering Services Market adapts, leveraging specialized skills to navigate complexities and deliver solutions. Emerging trends such as connected vehicles, road safety, and EV charging infrastructure underscore the industry's commitment to innovation and meeting evolving market demands
Engineering Services Market Scope |
|
Report Coverage |
Details |
Page number |
182 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.39% |
Market Growth 2024-2028 |
USD 397.82 million |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.27 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 34% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AECOM, AKKA Technologies SE, Babcock International Group Plc, Balfour Beatty Plc, Bechtel Corp., Brasfield and Gorrie LLC, Capgemini Service SAS, CIMIC Group Ltd., Cyient Ltd., Design Systems Inc., EMCOR Group Inc., Fluor Corp., Infosys Ltd., Jacobs Solutions Inc., Kiewit Corp., KKR BOSE DESIGN SERVICES Pvt. Ltd., Tata Consultancy Services Ltd., TRIPLAN India Pvt. Ltd., Virtuoso Projects and Engineers Pvt Ltd, and NV5 Global Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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