2017 Environmental Industry Overview

Transcription

1 2017 Environmental Industry Overview GRANT FERRIER ENVIRONMENTAL BUSINESS INTERNATIONAL INC. Publisher of ENVIRONMENTAL BUSINESS JOURNAL CLIMATE CHANGE BUSINESS JOURNAL 1

2 Grant Ferrier President, EBI Inc. Editor, EBJ; Editor, CCBJ Environmental Industry Summit XV March 22-24, 2017, Hotel del Coronado, Coronado CA Pacific Northwest Env l Industry Summit II, July 27, 2017, Seattle EBI DC Fall Strategy Summit, October 2017, Washington DC New England Environmental Industr Summit, December 1, 2017, Boston 4452 Park Blvd. #306, San Diego CA ext.15 grant@ebimailbox.com gf@climatechangebusiness.com Sign up for EBJ & CCBJ weekly news Environmentalbusiness.org

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4 Gallup : Highest Independent Identity

5 Gallup : Independents sub-title 50 Republicans Democrats Independents Apr Oct Mar Aug Dec May Dec Jul Feb Sep Apr Mar Nov Sep Aug Jun Aug Oct Oct 5-9

6 Trump? What?! Trump vs. Clinton: Could the polls be wrong? Trump WIN sparks Betting Armageddon as bookies get election wrong NOV 4 -- Barry Orr, a spokesperson for Betfair, said: " n previous presidential elections the favorite at this point has always gone on to become the President of the United States. "So with Trump's odds drifting despite huge support for him and several 6-figure bets in the week prior to Election Day, all signs point firmly towards a Clinton victory Probability CLINTON 71% TRUMP 29% Nov

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9 MOODY s Analytical (Wall Street; Oct 2016) Professional groups paid millions got the call badly wrong MOODY S: 9

10 Does turnout in flux put a few more states in play? At beginning of 2016, a few more states were in play, but ~40 were locked up. 173 in a dozen states???????? 10

11 Red States & Counties Blue Cities, 1992 to 2012 As Dems flock to cities, Red COUNTIES emerge More Counties now decided by Landslide margins [>10%] 11

12 Red States Blue Cities, Presidential Election Results by County Margin of Victory, Red or Blue, continued the trend since

13 Democratic Delegate Results by county hints. Dems split North South. Hillary s wins were in Red states Hillary dominating South with Black vote and elderly Sanders winning youth, Lakes, Mountain West and industrial unions Sanders surprise wins in Mich + Wisc 13

14 Republican Delegate Results by county Trump dominated South early, plus Industrial MW, NE Rubio confined to urban areas; Cruz winning rural areas, Plains, West; Kasich won OH 14

15 CONGRESS: Change Election? Not in the House Democrats 193 (+6) Republicans 238 (-6) 15

16 Popular Vote by Democratic Candidate, Getting to 50% of the popular vote is difficult X X X X X X X NIXON/Ford REAGAN/Bush GWBush TRUMP 16

17 TOP TRENDS 1. Infrastructure 2. Water 3. Information 4. Renewable & Distributed Energy 5. Transportation 6. Resilience & Adaptation 7. Flat is the new up in Remediation PACIFIC NORTHWEST ENVIRONMENTAL INDUSTRY SUMMIT

18 Economic & Industry Headlines Economy on Modest Growth Track: Low inflation, low interest, low wages, low morale Oil & Energy stabilizing at low-price scenario: Potential for Equilibrium in Supply and Prices Global Climate Commitments: Growth in RE and Emergence of Adaptation & Resilience Battle on Clean Power Plan and Supreme Court Infrastructure is key driver of growth & investment; Emphasis on transportation, water and power

19 Environmental C&E in Context: Growth vs GDP 10% USA GDP growth C&E Growth 8% 6% 4% 2% 0% % -4% SOURCE: EBI Inc., San Diego CA; Annual segment-by-segment research; government shutdowns in and October 2013

20 4 Key Growth Factors in ALL ++ or + in Economic Growth: GDP growth drives environmental markets. Real Estate: Property Values drive development, transactions, speculation, infill, brownfields. Federal Markets: DOE and DOD budgets and accelerated cleanup & closure; energy programs Oil & Gas Prices; Commodity Prices: Record prices and record profits by oil companies; same in Mining & Natural Resources; Growth driving global development Source: EBJ

21 Key Growth Factors in Economic Growth (GDP) n +n Property Values Federal Government Spending Oil & Gas, Commodity Prices n n n Construction Activity State & Local Infrastructure Spending Source: EBJ; n=neutral n +

22 Concerns about EPA (cut of 50%) overblown Acting Admin McCabe, an Obama appointee, tried to calm EPA staff last Friday 1) Senate will have say on any EPA budget. House will be more harsh on cuts. I doubt a cut of 50% is anything but Heritage / CEI chaff to draw missile fire. 2) FY2017 budget needs to be finished BY CONGRESS, not Trump. 3) Trump will outline FY2018 Budget Request by March, details in April. 4) GOP holds both Senate & House FY2018 budget could depend on regular order (House & Senate Conf Comm to decide final cuts) 5) Health care, Defense, and Supreme Court nominee plus Cabinet and 4,000 Fed Appointments all higher priorities than EPA ($9B). 6) Net: EPA could get cut $1B, which would fall disproportionately on contractors. So, the challenge: "10%-15% across the board" or cut programs (WOTUS). Conclusion: Cuts will occur; Elections have consequences Memo from Andy Paterson, EBJ s Man-in-Washington January 30, 2017

23 U.S. C&E Industry: $30 billion in ,000 25,000 20,000 Private Sector Government 15,000 10,000 5, Source: Environmental Business International Inc., San Diego, CA, based primarily on annual surveys of C&E firms, units in $mil. Share of revenues derived from government clients has gone from 59% in 2004 to 49% in 2014.

24 USA: Distribution of Environmental Consulting & Engineering Firms ($mil) Size Firms Gross Env'l C&E Revs Average Net Env'l C&E Revs % of Mkt Big 4>1 bil 4 7,824 1,956 7,488 25% Large> mil 45 13, ,638 36% Mid mil 144 5, ,103 17% S mil 143 2, ,041 7% S 5-10 mil 186 1, ,399 5% S 1-5 mil 576 1, ,592 5% S <1 mil 2,116 1, ,209 4% Total 3,214 33, , % Source: Environmental Business Journal's annual model of the U.S. environmental consulting & engineering industry based on annual surveys of C&E firms by EBJ, EBJ interviews, compiled revenue data derived from various sources including ENR, EFCG, ZweigWhite and public company data.

25 Revenue Performance of U.S. Environmental Consulting & Engineering Firms in Size 2013 Growth 2014 Growth 2015 Growth Big >1 bil -9.1% -3.4% -0.1% Big 100m-1 bil -2.4% 1.6% 2.2% Mid mil 3.3% 6.4% 4.9% S mil 8.3% 5.0% 3.8% S 5-10 mil 5.1% 3.7% 4.1% S 1-5 mil 7.9% 3.6% 3.0% S <1 mil 5.2% 4.8% 5.0% Total -1.5% 1.5% 2.4% Source: Environmental Business Journal's annual model of the U.S. environmental consulting & engineering industry

26 USA Client Sectors in : Topf Very strong Strong Good Slow/ Flat Decline 2013 Rank 2014 Rank Renewable energy development 8% 37% 42% 13% 0% Healthcare 8% 36% 44% 11% 0% Water utilities 3% 37% 42% 18% 0% Power utilities 8% 18% 42% 32% 0% Hospitality 0% 23% 37% 40% 0% Port authorities 5% 19% 32% 38% 5% Property developers: residential 0% 21% 44% 32% 3% Education 0% 18% 53% 26% 3% na 13 6 Consumer products 3% 9% 39% 48% 0% Property developers: commercial 0% 14% 54% 30% 3% Chemical 5% 16% 30% 41% 8% Transportation mfg (auto & aero) 0% 11% 49% 40% 0% Food & beverage 0% 14% 37% 49% 0% Transportation authorities 3% 13% 41% 41% 3% Elec/computer manufacturing 3% 3% 57% 37% 0% Solid waste utilities & companies 3% 6% 39% 50% 3% Banks & Law Firms 0% 6% 32% 62% 0% Source: Environmental Business Journal, 2016 Snapshot Survey 2015 Rank

27 USA: Client Sectors in : 2nd Very strong Strong Good Slow/ Flat Source: Environmental Business Journal, 2016 Snapshot Survey Decline 2013 Rank 2014 Rank Federal government: DOE 3% 8% 28% 56% 6% Major retailers 0% 6% 21% 74% 0% Other manufacturing 0% 6% 32% 59% 3% State government 0% 8% 31% 56% 5% Local government 0% 8% 33% 51% 8% Metals fabricating/coating 0% 6% 11% 83% 0% Federal government: DOD 3% 8% 30% 49% 11% Federal government: Other 3% 3% 22% 65% 8% Pulp & paper 0% 3% 20% 71% 6% Federal government: EPA 3% 0% 26% 60% 11% Oil & Gas Downstream 3% 11% 3% 63% 21% Petroleum retail/gas stations 0% 3% 3% 81% 14% Primary metals 0% 3% 14% 66% 17% Oil & Gas Midstream 0% 5% 15% 58% 23% Mining 0% 3% 11% 58% 29% Oil & Gas Upstream (E&P) 0% 5% 5% 44% 46% Rank

28 Regional USA Markets Very strong Strong Good Slow/Flat Decline 2015 Rank US: Southern California 12% 15% 36% 36% 0% 4 US: Southeast 10% 13% 35% 39% 3% 3 US: Northern California 6% 18% 32% 44% 0% 2 US: Pacific Northwest 6% 18% 29% 44% 3% 8 All United States 0% 19% 46% 32% 3% 5 US: Mid-Atlantic 0% 20% 43% 33% 3% 7 US: New England 0% 19% 42% 35% 3% 11 US: Gulf Coast/Texas 3% 19% 34% 34% 9% 1 US: Southwest/Desert 3% 9% 30% 55% 3% 9 US: Rockies 3% 9% 35% 47% 6% 6 Mexico 6% 6% 19% 61% 6% n/a US: Midwest 0% 3% 42% 48% 6% n/a Eastern Canada 0% 3% 23% 67% 7%n/a Western Canada 3% 0% 17% 67% 13%n/a Source: EBJ Snapshot Survey

29 Percent of U.S. transportation units or 'cars': NE Responses PNW Responses USA Responses Electric in % 9% 12% Electric in % 18% Electric in % 29% 23% Electric in % 45% Electric in % 56% 38% Self-Driving in % 4% 9% Self-Driving in % 14% Self-Driving in % 27% 19% Self-Driving in % 43% Self-Driving in % 61% 35% Source: EBJ 2016 Snapshot Survey: Feb/March 2016; EBJ Market Snapshot Survey: Pacific Northwest Region: July 2016; EBJ Market Snapshot Survey: New England Region: Nov 2016

30 Volume XXVIII: EBJ in EBJ Vol XXIX No 9/10: Environmental Industry Overview 2016 EBJ Vol XXIX No 7/8: Water/Wastewater 2016 EBJ Vol XXIX No 5/6: Outlook 2016: EBJ Snapshot Survey EBJ Vol XIX No 3/4: Environmental Contracting EBJ Vol XIX No 1/2: M&A EBJ Vol XXVIII No 12: Executive Q&As and 2015 EBJ Awards EBJ Vol XXVIII No 10/11: Consulting & Engineering 2015 EBJ Vol XXVIII No 9: Environmental Industry Overview 2015 EBJ Vol XXVIII No 7/8: Sustainability & Climate Adaptation EBJ Vol XXVIII No 5/6: Environmental Information Systems 2015 EBJ Vol XXVIII No 4: Remediation 2015 EBJ Vol XXVIII No 3: The Water/Wastewater Industry 2015 EBJ Vol XXVIII No 1/2: Industry Outlook 2015: EBJ Snapshot Survey

31 EBJ Subscriptions EBJ corporate electronic subscription: includes PDF file of editions, excel files of industry, segment and survey data for internal use. Special data sets and presentation files. up to 5 readers one year $1,250 up to 10 readers one year $1,500 up to 20 readers one year $1,750 up to 30 readers one year $2,000 up to 50 readers one year $2,500 over 50 readers one year $3,000 Discounts available for individuals and companies <50 people

32 CCBJ: Volume VIII in 2015 Climate Change Markets in U.S. Electric Power: Q Climate Change and Sustainability for the Institutional Market Q Post-Paris Drivers, National and Sub-National GHG Policies. Q Executive Review & 2015 CCBJ Awards (December 2015) lu.s. Local Government Market for Climate Resilience (Q4 2015) lclimate Change in Environmental Impact Assessments (Q3 2015) lwater Utilities & Climate Change (Q2 2015) lclimate Change Consulting Projects & Profiles (Q1 2015)

33 CCBJ: Volume VIII in 2015 Grant Ferrier President, Environmental Business International, Inc. Chairman, Environmental Industry Summit Editor, Environmental Business Journal Editor, Climate Change Business Journal 4452 Park Blvd. #306, San Diego CA 92116, ext.15 Sign up for free EBJ & CCBJ weekly news at Environmentalbusiness.org

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35 Trump Administration List of Top 50 Infrastructure Projects Dams, Locks, Lakes, Rivers 13 Bridges & Tunnels 7 Subway-Metro 6 Highways 6 Airports 4 Transmission 3 Railways 3 Water Supply 3 Hydro 2 Pipelines 1 Wind 1 Lab 1 Port 1

36 Governor s List of 51 California Infrastructure Projects: February Interchanges: LA-LB Otay Mesa border port 405: 16 miles express in OC Express lanes in SB-Rside on the 15 Desmond Bridge in Long Beach LA Metro: Purple & Orange LA Metro: Rail Fleet, 2024 Central Valley HSR LA Recycled Water Project Earthquake Warning SoCal Emerg Ops: Los Alamitos/N.Grd.