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Headline

Halcrow to be bought by US programme management giant CH2M Hill

Comment

Although the loss of a name may be felt at a personal level, unless the new owners significantly reduce the quality of the work they undertake (which seems unlikely), then this isn't bad for the industry. Much worse would be to let these companies struggle on, not earning enough to sustain their high quality work, and slowly sink into oblivion. As long clients continue to demand quality, and as long as there are enough participants in the market to have true competition, then the industry will be secure. Given that the global construction and engineering market was worth $2,276 billion in 2010 and the biggest player (Hochtief) had revenue of $27 billion, the largest company has a 1% market share. In most industries it is considered to be an excessively fragmented market if the largest firm has less than 20% share. We've got a lot of consolidation yet to come. Construction may even end up consolidating like the airline industry. Today there is less choice of carriers than their used to be - but the product is significantly cheaper as a result, so more people use it and the total market has grown. There's still room in the market for iconic quality, but the consolidation at the bottom end of the market is what has really made the difference. Sources: http://enr.construction.com/toplists/InternationalContractors/001-100.asp http://www.businesswire.com/news/home/20110929006003/en/Research-Markets-Global-Construction-Engineering---Performance

Posted date

26 October, 2011

Posted time

4:01 am

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