EPC Market Report 2025 (Global Edition)

CURRENT SCENARIO OF THE EPC (ENGINEERING, PROCUREMENT, AND CONSTRUCTION) MARKET

Key factors driving the growth of EPC (engineering, procurement, and construction) Market

• Infrastructure Development to Drive Demand for EPC Contractors

Development-related infrastructure projects demand large cash outlays as well as a lot of time and resources. Owing to this, many firms appoint an EPC firm while taking on a significant project.

These companies provide turnkey solutions to clients by working together throughout the project to guarantee the achievement of objectives and client satisfaction. Over the projection period (2022–2032), there will likely be a growth in demand for EPC services due to the significant increase in infrastructure construction occurring globally. 

As per the World Economic Outlook, by the International Monetary Fund (IMF), infrastructure project development across the globe was around 2,500 (two thousand five hundred different projects) which is an increase of 5.5% from 2019. 

Out of these projects, half were classed as sustainable infrastructure projects, including the development of renewable energy plants. EPC firms use their resources, experience, and industry knowledge to provide optimum services for client projects. This is an ideal option for a client to have a single relationship and a single point of responsibility to manage a site/infrastructure construction. 

One of the main factors propelling the global market for EPC (engineering, procurement, and construction) consulting is the growing number of large-scale energy infrastructure projects. Both public and private entities are making significant investments in energy-related infrastructure such as electricity transmission networks, mining facilities, renewable energy projects, and oil and gas exploration. 

• According to the International Energy Agency, the global investment in energy supply infrastructure is projected to reach US$1.9 trillion annually by 2030. This will create significant demand for EPC (engineering, procurement, and construction) consulting services to ensure timely and successful execution of these complex capital projects while optimizing budgets and mitigating risks by 2030.

Therefore, Increasing number of large-scale energy infrastructure projects across the globe is a major driver for the EPC (engineering, procurement, and construction) consulting market. 

• Integration of Advanced Technology for Project Execution propelling the market growth 

For EPC contractors to undertake turnkey engineering projects and produce complex production units, they must possess a high degree of engineering competence in addition to sophisticated supply chain and capital management phases. Clients, regardless of any backend limitations, want absolute adherence to quality standards and timeframes. 

Consequently, skid-mounted plants and technologies, remote plant management and operation, automation, and digitalization are becoming more and more commonplace in EPC services. Automation makes it possible to predict engineering resources, materials, and labour requirements with an accuracy of up to 95% of the final design. 

AI-driven intelligent automation, AR, and VR for better safety and communication, as well as IoT-enabled monitoring and maintenance to offer efficient engineering and design services, is been adopted by EPC contractors, which is driving overall market growth.

• According to a report by the World Economic Forum, in 2021, the adoption of digital technologies in construction could reduce carbon emissions by up to 20% through more efficient processes and materials usage.

(Source:https://initiatives.weforum.org/digital-transformation/digital-and-climate)

Construction is one of the least digitized industries but this is changing with various new technologies being deployed to improve productivity, efficiency, and safety. EPC consultants are adopting digital solutions like building information modeling, virtual reality, predictive analytics, drones, and artificial intelligence (AI) to enable data-driven decision making during design and construction

Key factors hampering the Market growth

• Shortage of skilled labor force to hamper the market growth

For the effective management of big and complex projects, the EPC (engineering, procurement, and construction) consultancy domain requires specialised skill sets and substantial industry expertise. However, since fresh talent acquisition has slowed down and workforces with vital technical skills are retiring, the business is confronting an acute talent crisis. It is difficult for EPC companies to compete on and complete large capital projects when there is a shortage of skilled engineers, designers, and project managers who can work on large-scale projects. Opportunities for progress are still being limited by the availability of skilled talent.

The construction and engineering sectors rely heavily on labour to complete projects. It is anticipated that a labor shortage in these sectors will impede market expansion. Age has also been noted as a growing issue in the construction sector. Over the next ten years, it is anticipated that over one-third of American construction workers will retire. Trying to close the talent gap between the influx of young, fresh talent and the growing number of senior workers retiring has become a difficult task. 

Because of this, it is anticipated that the EPC market's growth will be somewhat impeded in the years to come.

Opportunity

• The adoption of digital twins to act as a big opportunity got the EPC Market 

A digital twin is an electronic copy of a real asset that allows for performance optimization through modeling, simulation, and visualization. Digital twins are being used by EPC consultants in the planning, design, and construction phases to virtually build and test models, find problems earlier, and improve The use of digital twins is growing as businesses become more aware of their advantages, which include fewer rework, better teamwork, preventative maintenance, and data integration with IoT (Internet of Things) systems. According to the Qatar Development Bank, the US$ 8 Bn project involved master planning, design, and construction of over 28 residential, commercial and retail buildings across 4 million sqft with tight schedules.

Furthermore, the market's growth will be aided by digital twins' continued evolution in tandem with advancements in augmented and virtual reality. Encouraging prospects for market expansion are being generated by rising public and private investments in digital transformation solutions. To speed up digitization, nations including the United States, India, Australia, Brazil, Saudi Arabia, and South Africa are heavily investing in digital transformation solutions.

• For instance, in March 2023, WSP collaborated with Amazon Web Services, Inc. to develop digital twins for complex infrastructure. The collaboration intends to leverage Amazon Web Services, Inc.'s cloud data processing and analytics services to drive innovation and long-term solutions across several industries.

It aims to utilize Amazon Web Services, Inc.’s technology to improve WSP's services in areas, such as planning for infrastructure, environmental sustainability, and data-driven choices
(Source: https://www.wsp.com/en-au/news/2023/wsp-collaborates-with-aws)

By integrating these cutting-edge technologies, businesses can improve system performance and productivity, which propels market expansion. In order to recuperate financial losses, businesses are concentrating on implementing digital twin solutions to optimise their supply chains and operational procedures. In order to increase their market profitability, industry participants are being encouraged by the growing need for digital twin solutions to expand their geographic reach and enhance their range of products. 

How did COVID–19 Impact the EPC (engineering, procurement, and construction) Market?

During the commencement of the COVID-19 pandemic, the worldwide demand for engineering, procurement, and construction market was marginally reduced because to the lowered investment by government and private firms in infrastructure development, which led to cutbacks in service infrastructure. Therefore, it can be said that the recent COVID-19 epidemic has gradually reduced the development of new smart city networks, which has hampered the uptake of these services. In addition, the illness has presented a hitherto unseen problem for governments and businesses across the globe. 

In several countries around the world, this has regularly led to lockdowns and business closures, forcing employees and individuals to stay at home in order to stop the virus from spreading. Furthermore, because of tight national lockdowns, manufacturing industry shutdowns frequently cause supply chain disruptions that strain the availability of the various goods and services this sector provides. When coupled with the worldwide shutdowns, this has frequently led to delays in the engineering, procurement, and construction industries because the government has delayed funding or investments in some projects. The expansion of the worldwide engineering, procurement, and construction market is therefore anticipated to be constrained.

The Engineering, Procurement and Construction (EPC) industry by nature has traditionally been fragmented, complex, and averse to change. EPC contracts are complex with multi-year engagements supported by multiple By its very nature, the Engineering, Procurement, and Construction (EPC) sector has always been dispersed, intricate, and resistant to change. EPC contracts are intricate, with several subcontractors supporting multi-year engagements. For EPC companies, such a disjointed and historically fragmented ecosystem brings inefficiencies and business issues on many levels. Fortunately, however, the EPC industry had started to recognise the need of digital transformation even before to the emergence of the COVID-19 crisis. The situation has simply quickened the course of events.

Although the COVID-19 pandemic continues to provide difficulties for EPC companies in the form of postponed or cancelled contracts and extensive interruptions to the value chain, it also presents a chance to overcome the resistance to change. The moment is right to concentrate on using digital technology in targeted ways to solve some persistent problems in the sector. The industry leaders who are already formulating their plans will prosper in the new reality because they understand that those who strive to create it will own the future.

The Global EPC Market is witnessing significant growth in the near future.

In 2023, the Engineering segment accounted for noticeable share of global EPC Market and is projected to experience significant growth in the near future.

The Oil and Gas segment is expected to expand at the significant CAGR retaining position throughout the forecast period.

Some of the key companies WSP Global , Technip Energies and others are focusing on its strategy building model to strengthen its product portfolio and expand its business in the global market.

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