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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. Market growth rates are influenced by several factors: the deployment of engineering services to reduce overhead costs, the growing adoption of industrial automation, and the delegation of ancillary tasks that enable organizations to focus on core competencies. Utilizing engineering services allows companies to streamline operations, optimize efficiency, and mitigate expenses associated with maintaining in-house expertise. Moreover, the increasing adoption of industrial automation enhances productivity, reduces labor costs, and improves operational reliability across manufacturing and service sectors. Additionally, outsourcing ancillary tasks such as facility management and administrative functions enables businesses to concentrate resources on core activities, fostering innovation and competitive advantage. These trends collectively drive market expansion by promoting operational efficiency, cost-effectiveness, and strategic focus on business priorities. As organizations leverage these strategies to enhance productivity and flexibility, opportunities arise for service providers to support sustainable growth and innovation within diverse industry landscapes.
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The market growth analysis report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segment
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; 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 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 encompasses a wide array of disciplines and sectors, ranging from planning and consulting to the design and construction of highways, bridges, and tunnels. Engineering firms play pivotal roles in managing water sources, addressing infrastructure needs in both the building sector and the aircraft sector. Civil engineering services span various engineering disciplines, utilizing both offshore models and onsite models to optimize project execution. These services are essential for ensuring structural integrity, safety, and efficiency in construction projects worldwide. As demand grows for sustainable and resilient infrastructure, engineering services are adapting to incorporate advanced technologies and innovative solutions, catering to both public and private sector clients seeking reliable and forward-thinking engineering expertise.
Deploying engineering services reduces overhead costs is notably driving market growth. Engineering services play a pivotal role in design, planning, and consulting for various industries, including highways, bridges, tunnels, water sources, and infrastructure projects. In the automotive sector, engineering services are utilized for product engineering and process engineering, while in the aircraft sector, they are essential for designing and analyzing aircraft structures. The building sector benefits from engineering services through modern construction techniques, artificial intelligence, and the Internet of Things. Smart city development requires engineering services for sensing technology, data analytics, and energy-efficient buildings. Engineering analytics, machine learning, and IT solutions are crucial for graduate engineers and businesses in the circular economy and renewable energy sectors.
Mobile technologies and automation-related services are also integral to engineering services in the power plants, dams, rail structures, and various industries. Consulting services enable businesses to stay updated on new technologies and innovations while reducing in-house R&D and training costs. Key engineering services include architectural design, energy-efficient buildings, and infrastructure projects. Engineering services are vital for automotive OEMs, electronics, software, and various industries, leveraging AI, IoT, cloud computing, and other advanced technologies.
Engineering services embracing IoT revolution is the key trend in the market. The engineering services market is experiencing substantial growth due to the integration of advanced technologies in various industries and verticals. Design, planning, and consulting services are in high demand for infrastructure projects such as highways, bridges, tunnels, water sources, and energy-efficient buildings. The automotive and aircraft sectors are embracing modern construction techniques, including artificial intelligence, machine learning, and the Internet of Things (IoT), for product and process engineering. Smart city development is a significant trend, with spending projected to reach unprecedented levels. Sensing technology, data analytics, and IT solutions are crucial components of this development, enabling the creation of energy-efficient buildings, circular economy projects, and renewable energy initiatives.
Graduate engineers are essential in implementing these technologies, with mobile technologies and machine learning playing a pivotal role in automation-related services. Power plants, dams, rail structures, and infrastructure projects require engineering analytics to ensure optimal performance and efficiency. The integration of AI and IoT in cloud computing is revolutionizing engineering services, enabling real-time monitoring and predictive maintenance.
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 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 market trends and analysis 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 growth and forecasting report includes key players' 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.
The market plays a pivotal role in the advancement of smart city development by integrating sensing technology, data analytics, and IT solutions into modern construction projects. It encompasses a wide range of disciplines including engineering analytics, mechanical engineering, electrical engineering, piping engineering, and structural engineering to support the infrastructure needs of power plants, dams, rail structures, roads, railways, water distribution systems, sewers, sewage treatment, and environmental infrastructure. With a focus on sustainable practices and achieving renewable energy goals, engineering firms also contribute to smart manufacturing and application engineering across various sectors such as automotive OEMs, aerospace, and construction technology. As cities expand and evolve, engineering services are essential in urban planning, landscaping, and the creation of green spaces and parks, ensuring efficient and resilient urban environments. Product engineering, process engineering, automation-related services, and infrastructure projects are increasingly leveraging IoT, cloud computing, and architectural design innovations to develop energy-efficient buildings.
Industry 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 forecast period |
Customization purview |
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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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