Environmental Industry Looks Forward to Better Growth Prospects in 2015


News Release -- San Diego, Calif. -- Growth rates in the $345 billion U.S. environmental industry will continue to improve in 2015-16 as government markets stabilize and the recovering economy benefits from low oil prices and more development and construction, according to Environmental Business Journal's (EBJ) Environmental Industry Outlook edition.

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Drawing on the results of its annual proprietary Snapshot Survey of industry executives, plus interviews with top environmental executives and experts and historical analysis of the 14-segment environmental industry, the EBJ Industry Outlook ranks the best business prospects for environmental firms in 2015, in addition to forecasting revenue and segment growth.

Infrastructure Re-Emerges; Climate Response In Demand

Respondents to EBJ's 2015 Snapshot Survey reported that average company growth had risen to 3.9% in 2014 - up from 3% growth in 2013. Environmental industry segment growth also rose to 3.9% last year and is forecast to grow at a 4.4% mean growth rate in 2015.

"First, economic growth and property development are trending in the right direction, albeit with variations by region and sector," noted EBJ's Senior Editor George Stubbs. "Second, infrastructure is having a stabilizing influence-particularly as it relates to the water/wastewater segment, which still accounts for more than a third of environmental consulting and engineering revenues."

Indeed, infrastructure re-emerges strongly in EBJ's 2015 forecast: "Energy and resource opportunities are cooling considerably compared with previous years in favor of construction and water/wastewater," Stubbs noted. "The water/wastewater sector is as steady an environmental market as there is, and any elevated attention to infrastructure could give it a good boost."

"There's certainly been recent pressure to act on infrastructure," Stubbs continued. "Entities like the American Society of Civil Engineers and the World Bank have consistently given U.S. infrastructure low grades, and seemly every month a new disaster fixes attention on the problem. The question is, as always, will Congress respond?"

A newer driver for growth in 2015 is the emergence of climate resiliency and climate change adaptation as distinct areas of demand. This new factor in EBJ's forecast for the environmental industry has been paced in part by government and private sector responses to Katrina, Sandy and a growing list of weather-related disasters and threats.

Just as Love Canal, Three-Mile Island, Bhopal, and Exxon Valdez stimulated policy and liability changes in the '70s and '80s, recent weather-driven "natural" disasters have stimulated reaction from government, although they have not yet led to a permanent framework for how agencies and companies build climate resilience and adaptation scenarios into long-term planning.

Top Opportunities; Oil & Gas Drops In Ranking

While the dramatic drop in oil prices has helped to stimulate construction, chemical production, manufacturing and other sectors that use environmental products and services, it has also curtailed capital investment in oil and gas development-an area that for the last several years has been a leading source of business for environmental companies.

By contrast, EBJ's 2015 Snapshot Survey saw upstream oil & gas plummet to number 27 out of 33 client areas regarded as having good "prospects for growth." The five client sectors predicted to offer the best opportunities for growth for environmental companies in 2015 and 2016 are: healthcare, renewable energy development, chemical production, water utilities, and power utilities.

Squeezed federal government spending on environmental cleanup is still curtailing companies with exposure to the public sector, although some state & local governments are showing signs of a pick-up. "Fortunately, the threat of government shutdown and budget cuts that undermined growth at the end of 2013 have largely abated," said Stubbs. "Except to the extent that federal cleanup budgets are affected, many environmental executives learned long ago that changes in Washington don't have too significant an impact on their business fortunes."

EBJ's Environmental Industry Outlook edition also looks at macro-economic and regulatory trends, mergers and acquisitions, politics and policy, and the sustainability business, in addition to offering detailed profiles of leading environmental firms.

Data charts include:

  • Annual Growth of Environmental Service Firms
  • Operating Margins of Environmental Firms
  • Growth Prospects by Service/Media
  • International Market Attractiveness
  • Growth Prospects by Region (US)
  • Impacts of Climate Change

See TOC and Purchase EBJ Environmental Industry Outlook edition for $250

For comment and access to research, contact:
Grant Ferrier, President, EBI Inc.
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