Trenchless Technology’s 2017 Top 50 Ranking Reveals Moderate, Incremental Growth
Welcome to Trenchless Technology’s 21st annual ranking of the Top 50 Trenchless Engineering Firms in North America.
Compiling revenue figures and data to be submitted for the survey each year is not an easy task for engineering companies, and Trenchless Technology would like to thank all firms that participated this year.
Only revenue figures that firms submitted to Trenchless Technology were used to compile this ranking.
In presenting these results, Trenchless Technology’s goal over the past 20-plus years has been to give readers a glimpse of the work completed by top trenchless engineering companies, thereby offering a general impression of annual market performance.
We examine firms’ trenchless revenue relative to total company revenue, trenchless design workforce and projects completed in the past five years. We also ask for the number of projects completed in the past year in various market segments (pipe bursting, HDD, microtunneling, etc.).
It is important to note that mergers and acquisitions can affect the results, though there was not much of an impact this year. Of particular note is the August acquisition of CH2M by Jacobs Engineering Group. At the time of the acquisition, Jacobs announced that the transaction was expected to close in the company’s fiscal 2018 first quarter. Because the acquisition is not finalized, Jacobs’ and CH2M’s revenue figures were kept separate for this year’s survey.
Notable Highlights in the Top 50
Even with the Jacobs-CH2M merger kept separate, CH2M retains its position at No. 1 for the third consecutive year, reporting $214 million in trenchless revenue in its last fiscal year. This marks the first time a No. 1-ranked firm has surpassed the $200 million mark on Trenchless Technology’s Top 50 ranking, and therefore, the largest figure ever recorded by Trenchless Technology for trenchless revenue in a fiscal year.
Mott MacDonald and Stantec also repeat as Nos. 2 and 3, respectively. Black & Veatch jumps up to No. 4, while AECOM (No. 5) barely edges out Hatch Corp., which comes in at No. 6. CDM Smith ranks in at No. 7 with Jacobs at No. 8. Kleinfelder jumps into the top 10 for the first time at No. 9, rounded out by KCI Technologies, which has also trended toward the top 10 in recent years.
With a reported $30 million in trenchless revenue, Canadian firm CCI Inc. comes in at No. 12 – the largest 100 percent trenchless engineering firm in North America and one of four 100 percent trenchless firms to make the Top 50 in 2017 (the others being Staheli Trenchless Consultants, CNA Consulting Engineers and Laney Directional Drilling).
Houston-based firm Lockwood, Andrews & Newnam, Inc. (LAN) rebounded in its past fiscal year, making the biggest jump to No. 13 after finishing 31st in 2016. The company reported trenchless revenue of $24 million in its last fiscal year, quadrupling its figure from a year ago.
All in all, the 2017 survey results for 2016 revenue – or the last fiscal year – are similar to what was reported last year. Looking specifically at trenchless revenue, this year’s Top 50 trenchless firms did a collective $1.3 billion in work, up slightly from $1.2 billion last year. Of the Top 50 firms’ collective revenue of $44 billion for North American work, roughly 3 percent was in trenchless engineering.
On the workforce front, the industry experienced a slight dip from 2016. The 2017 survey revealed more than 4,358 professionals working in trenchless design across the Top 50 – down from 4,542-plus in 2016.
What Do the Results Say about the Trenchless Market?
In short, modest, yet positive growth. Trenchless experts say there is a positive outlook, as well.
“While trenchless technologies have been experiencing growth and greater acceptance, I believe we are going to see even greater growth in the coming decades,” says Michelle Macauley, P.E., LEG, national trenchless leader and geotechnical engineer with Jacobs Engineering Group. “Applications of trenchless technologies are spanning wider ranges of soil conditions, diameters, project types, disciplines and geographic areas. Projects that were previously too large, too long, too curved or too challenging are becoming less risky due to advances in equipment, technology and software.”
Perhaps the most significant piece of evidence pointing to recent market growth is the $1.3 billion figure of total trenchless revenue among the Top 50. That number was $947 million in 2013 – a 41 percent increase over the past five years.
The total number of trenchless projects completed by the Top 50 in the past year is also up. This year’s Top 50 reported 11,672 total trenchless projects in the past year – an increase from 10,683 on our 2016 survey. Within that project total, horizontal directional drilling is the market segment with the most completed projects at nearly 3,500, followed by subsurface utility engineering and pipe rehabilitation.
Large Firms vs. Specialized Firms
Of course, one glaringly obvious result about this year’s Top 50 is that large engineering companies are simply dominating the market. Four of the top 10 firms from this year have been ranked in the top 10 for the past 10 years. Six of them have made the top 10 in each of the past five years. At the same time, half of the firms in this year’s Top 50 reported less than $10 million in trenchless revenue.
However, the larger engineering companies’ trenchless work is often a smaller percentage of total revenue. For example, at $3 billion, Parsons Corp. is in the top five for total revenue, yet less than 1 percent of that is in trenchless as the company ranks 28th. Furthermore, Trenchless Technology’s 2016 Top 50 included seven firms with $3 million or less in trenchless revenue, while the 2017 survey has none, revealing a slight uptick for smaller, specialized firms.
Macauley adds that while the market is expanding, it will continue to get more competitive, both for larger and smaller firms. “As more companies expand into the trenchless market, a challenge for the industry will be to maintain quality and consistency of design and construction,” she says.
In other news on the acquisition front, RMC Water and Environment – a firm that reported more than $3 million in trenchless revenue in last year’s survey – was acquired by Woodard & Curran in late 2016. While Woodard & Curran reported less than $2.5 million in trenchless revenue for the 2017 survey, the firm says the acquisition has helped expand its trenchless services.
“Woodard & Curran is a company that is focused on water and the environment, so a lot of our work is in the public infrastructure sector,” says Phyllis Brunner, P.E., president of consulting for Woodard & Curran. “As we looked to expand our national footprint into California, acquiring RMC Water and Environment was an ideal fit. As we continue to grow organically and through acquisitions, we will look for opportunities to make our water infrastructure practice more robust, and trenchless technology certainly plays a role in that.”
Finally, Murray, Smith & Associates rebranded to Murraysmith earlier this year in May. With nearly $3.7 million in trenchless revenue reported, it jumps from No. 50 in 2016 to No. 39 in 2017.
Participating in the Top 50 Survey
Submittals from engineering firms are imperative to making Trenchless Technology’s annual Top 50 ranking as comprehensive as possible. If you are a trenchless engineering company and would like to learn more about how to participate in the future, please contact Sharon Bueno, managing editor, at [email protected].