Environmental consulting sector enjoys solid growth

The UK's environmental consulting (EC) sector defied Brexit uncertainty to grow by 5.1% in 2017, with the top five firms holding almost a third of the market share.

The findings from Environment Analysis (EA) also show that revenues jumped from £1.65bn to £1.74bn following a rise in infrastructure opportunities and public sector spending.

And 2018 is expected to have provided similar growth, with early analysis suggesting the sector expanded by 4.7% last year as revenues increased to £1.8bn.

The government's recent Clean Air Strategy, Resources and Waste Strategy and Environmental Principles and Governance Bill are largely behind the projected growth for 2018.

During this time of huge political and economic hiatus, the ability of the UK EC sector not only to show resilience, but to record organic growth and outperform the economy is extremely positive,“ research co-author, Ross Griffiths, said.

Growth in 2017/18 exceeded our expectations as spending on transport and energy infrastructure schemes has kept environmental consulting practices busy.“

The findings show that the top five EC firms – RPS, Jacobs, WSP, AECOM and Arcadis – held a combined market share of 31% in 2017, up from 29% the previous year.

This is considerably higher than the 17% of market share held by the top five players in 2008, of which only RPS remain, with the researchers highlighting the impact of consolidation following Jacobs' $2.9bn acquisition of CH2M last year.

The top 28 EC firms hired an additional 833 environmental consultants in 2017 – equivalent to year-on-year growth of 7.3%.

The research also shows that revenue from infrastructure projects jumped by 20% in 2017, largely thanks to opportunities associated with the High Speed 2 rail line and house building commitments.

And infrastructure expected to be a particularly important source of growth moving forward, although the EC sector's expansion is forecast to slow to 2.9% this year as Brexit puts some spending decisions on hold.

Nevertheless, with EC managers more likely to complain about a shortage in skilled staff than a shortage in billable work, and recruitment hitting a nine-year, post-recession high, we believe the fundamental drivers for growth remain in place for 2019 and beyond,“ Griffiths added.

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