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The global geotechnical services market size was USD 2.04 billion in 2019. The global impact of COVID-19 has been unprecedented and staggering, with geotechnical services witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market will exhibit a huge decline of -18.06% in 2020. The market is projected to grow from USD 1.67 billion in 2020 to USD 2.58 billion in 2027 at a CAGR of 6.4% in the 2020-2027 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Geotechnical engineering is a civil engineering branch that involves the study of materials, present below the earth’s surface. Geotechnical services are used planning infrastructures such as bridges & tunnels and other onshore and offshore constructions. The services also includes the mathematical calculations, and gauging load-bearing capacity, and deformation in man-made structures. Growing construction & infrastructure industry across the globe is a major factor driving the growth of the market.
Halt on Operations to Adversely Affect Geotechnical Services in Pandemic
COVID-19 become a global health threat since December 2019. Its impact on numerous sectors, such as manufacturing, construction, hospitality, and others have been explicit and unprecedented. The construction & infrastructure sector is one of the sector which largely affected owing to a lockdown announced in several countries. The lockdowns have affected various construction & infrastructure projects due to supply chain disruptions and unavailability of the workforce issues. In March 2020, Boston became the first city in the U.S. to shut down all construction work to curb the COVID-19 outbreak. This provides a negative impact on the geotechnical services market growth.
Furthermore, several oil & gas, mining, and renewable projects are also suspended due to COVID-19. In April 2020, Ørsted, the Denmark-based company, said at least five of its projects off the U.S. East Coast could be delayed due to impacts from the coronavirus pandemic. The company said the projects with a total generation capacity of about 3 GW could fall victim to a slowed permitting process caused by shutdowns due to COVID-19.
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High Growth in Offshore E&P Activities to Push Growth
Global energy demand is increasing continuously owing to growing population and industrial developments. According to BP statistical review, in 2019 global oil consumption rose by 1 million barrels per day, while natural gas consumption increased by 77 billion cubic meters. This upsurge in demand forces the companies to increase their fuel production. Due to maturing onshore oil fields, companies are moving towards the more remote and deeper offshore areas. As a result, demand for geotechnical service is high in deep-water E&P activities. Thus, increasing offshore E&P activities is likely to provide growth opportunities to the geotechnical service market.
Rising Investment in Wind Energy to Drive Market Growth
An increase in environmental protection regulations across the globe forces the power generation industry to shift to cleaner and environment-friendly energy resources. Several countries around the world are highly focused on developing renewable energy power generation to reduce their dependence on conventional power generation through fossil fuels. Wind energy is a major renewable energy source with the potential to meet many of the world's challenges. Geotechnical surveys are one of the major services in wind turbine installation. Geotechnical surveys physically perform sampling or testing of the seabed characteristics for developers to guarantee the prime placement of offshore wind turbine, cabling infrastructure, and substation. According to WindEurope, wind power installation rose to 651 GW, as the world installed 60.4 GW of new wind power projects in 2019. Hence, such tremendous yearly addition incapacity of wind power is certainly boosting the geotechnical services market globally.
High Growth in Construction Industry is Fuelling the Market Growth
There has been exceptional growth in construction activities across residential, commercial, infrastructural, industrial, and utility sectors in developing economies. Several countries such as India, China, Indonesia, Qatar, Thailand, and Brazil have extensive ongoing construction activities, and a high number of construction projects are set to go underway. With nations such as India and China looking to strengthen their infrastructural base, government aids and subsidies are set to attract high investment in the construction industry. Also, certain countries such as Sri Lanka, India, and Thailand are promoting their tourism. Therefore, the construction of hotels, resorts, parks, & other commercial buildings is increasing rapidly.
The geotechnical survey helps to know the site conditions and design & construction recommendations to the roadway design, bridge design, and construction personnel. Qatar will host the FIFA World Cup 2022. The country invested a considerable amount of money in the construction and renovation of stadiums. Besides, allocating twelve venues among seven major cities. This is expected to propel the overall market.
Higher Cost of Geotechnical Services to Hinder Market Growth
The cost of geotechnical equipment rises with range, resolution, accuracy, precision, and repeatability. Advanced sensors, software, and complex data acquisition systems increase the cost of geotechnical solutions. Further, the cost of hardware and software used in geotechnical instrumentation and monitoring solutions and associated services depends primarily on the complexity of structures. Thus, the high price of geotechnical services acts as a restraining factor for market growth.
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Underground City Space Segment to Grow at Highest Growth Rate during 2020-2027
Based on the type, the market is divided into underground city space, slope and excavation, and ground and foundation. The underground city space segment accounted for a dominant share of the market in 2019. This type of service is majorly used to construct underground tunnels for rail and metro, water & gas pipeline construction, and other public service facilities. The demand for rail and metro and other public service facilities is growing at a rapid pace. Thus, the need for underground city space service is high. Ground and foundation is also a major segment and is likely to contribute considerably throughout the forecast period. This service is used before the construction of buildings, defense activities, and municipal activities, among others. .
Municipal Segment Dominated the Global Market
Based on the end-user, the market is divided into municipal, bridge and tunnel, oil & gas, mining, marine, building construction, and others. The municipal segment held a dominant share of the market in 2019. The municipal segment includes the geotechnical services used for utility pipeline construction, dam construction, government buildings, power plant construction, and airports, among others. Mining is another major segment of this market and is projected to contribute significantly during the forecast period. Geotechnical Engineering has become an integral part of mine operations. Recently, most mining companies develop in-house geotechnical expertise at corporate and mine levels and hire consultants to undertake mining project studies or solve specific ground engineering problems. This important change was brought about by strict mine safety regulations and the mining community’s gradual recognition of the value of active ground engineering in optimizing mine design and managing the geotechnical risks.
In the marine sector, geotechnical services are also used in understanding the earth's surface at the ocean or river floors. Marine geotechnical services involve analyzing sea-bed and under sea-bed materials for constructing offshore structures such as wind turbines, anchored floating structures, and even piers and jetty.
Asia Pacific Geotechnical Services Market Size, 2019 (USD Billion)
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Geographically, the global geotechnical services market has been evaluated across five major regions, including North America, Asia Pacific, Europe, and the Middle East & Africa, and South America. Asia Pacific held a leading share of the global market in the year 2019 and witnessed substantial growth during the forecast period. China, India, and Southeast Asian countries are projected to be a lucrative markets owing to government regulations supporting renewable power generation resources. Additionally, high investment in the construction & infrastructure sector provides a further boost to the growth of the market.
The Middle East & Africa region is projected to witness healthy growth during the forecast period. UAE, Saudi Arabia, Qatar, and Nigeria are the major countries in the region. Growing investment in public transportation in GCC countries fuelling the growth of the market. Saudi Arabia holds large reserve of mineral resources than any other country in the Gulf region. The mining sector occupies a prominent position in Saudi Arabia's program of diversifying its economy away from oil. In 2016, Saudi Arabia announced a plan to raise the value of its mining operations to reach SAR 260 Bn under Saudi Vision 2030.
In North America, increasing oil & gas activities positively influence the growth of the market. According to BP Statistical Review, the region was the second-largest producer of oil and the largest producer of gas in the world in 2018.
Key Participants Are Focused On New Contracts to Strengthen their Position
The global market is fragmented due to the large number of players operating in the market. Fugro, AECOM, Stantec, and Kiewit Corporation lead the market accounting for a dominant share in 2019. The major players in the market are adopting several strategies to strengthen their position in the market. Focusing on a geotechnical services contract is one of the ideal methods by companies. For instance, in August 2020, Fugro was awarded a 5-year indefinite delivery indefinite quantity (IDIQ) contract by the Louisiana Department of Transportation and Development (DOTD) to provide statewide geotechnical engineering services. The contract term was from July 2020 to July 2025.
LIST OF KEY COMPANIES PROFILED:
An Infographic Representation of Geotechnical Services Market
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The geotechnical services market research report includes a detailed industry analysis and focuses on key aspects such as leading companies, leading type, and end-user of the services. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD Billion)
By Type, End-user, and Region
Fortune Business Insights says that the global market size was USD 2.04 billion in 2019.
In 2019, the Asia Pacific market size stood at USD 0.57 billion.
The global market is projected to grow at a CAGR of 6.4% in the forecasted period
The underground city space type segment is expected to be the leading segment in this market during the forecast period.
The global industry size is anticipated to reach USD 2.58 billion by 2027, growing at a substantial CAGR of 6.4% during the forecast period (2020 -2027)
High growth in the construction & infrastructure industry across the globe boosts the market's development.
Asia Pacific dominated the market share in 2019.
Fugro, AECOM, Stantec, and Kiewit Corporation are eminent players in the global market.
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