Market Trends in Engineering and Construction

Market Trends in Engineering and Construction

Article Featured in GSA Business
August 2009

"Just about every company is looking at alternative ways to do business and conserve resources," says Kevin Bean, PE, president and CEO of O'Neal, an engineering and construction company based in Greenville. "During the last year, we've seen a number of companies delay or defer projects," Bean notes, "but recently we¬'ve seen an increase  in construction project activity."

Though the economy is volatile now, O'Neal has been creating cost-effective engineering solutions for more than 35 years by integrating project planning, design, and construction. The team never takes its collective eye off market changes to ensure their clients get maximum returns on their investment.

Brian Gallagher, director of marketing, says, "We are focused on our traditional markets such as manufacturing, pharmaceutical, and specialty chemical, while engaging in emerging markets such as renewable energy." At O'Neal, they¬'ve been observing these trends.

Power - "Two years ago I would have said that the power industry is the most  capital intensive, but we¬'ve seen a change with pending cap and trade, state regulations, federal mandates, and the stimulus package. As O'Neal does infrastructure work at plants, we've noticed restrictions and uncertainty are stimulating interest in alternative energy" Bean noted. Gallagher concurs: "Stimulus dollars are spurring people to consider options including solar, methane, biomass and biofuels. Smaller companies with proprietary technology are turning to O'Neal to help get them to market."

Manufacturing ¬Ė "There is a recent increase in activity," says Bean, as budgets on deferred projects are being released. But decisions are slow and scrutiny has increased. Still, he believes the automotive industry¬'s Southern Original Equipment  manufacturers (OEMs) will be the first to rebound. Gallagher adds, "They have  started tooling for the next generation of cars and manufacturing of batteries." He says companies that manufacture hydrogen fuel cells, photovoltaics, and solar  panels are adding capacity as European and Chinese firms build plants in the US.

Chemical ¬Ė "Companies that make raw materials used in plastics are gearing up to  put new materials and additives in finished goods," says Bean. "A growing trend is using
biomass-based feedstocks in the production of intermediate chemicals," which, he  explains, allows those companies to control the cost of raw materials, unlike the manufacture of petroleum based chemicals, which has tremendous return variability  based on the changing price of oil. "Biomass has a definite future," he states.

Pharmaceutical/Biotech ¬Ė Many projects were deferred at the beginning of the  year, and $300 million greenfield expansions have given way to upfitting and  retro-fitting of existing facilities. "But talk of a new healthcare program has caught the attention of the pharmaceutical industry," says Gallagher, adding generic manufacturing is growing as blockbuster drugs come off patents. Bean says, "We do well with projects that are complicated and fast track. Generic drugs must get to market quickly."

Overall Bean says, "Right now there are private companies with strong balance sheets seeking opportunities and market share. Whether they¬'re planning  an expansion or new facility, we can help them develop their project and cost as early as possible, so they can make solid business decisions."