Architecture, Engineering, and Construction Services
Overview
The AEC sector, which includes Construction, Architecture, and Engineering services, provides a host of services surrounding the building and planning of residential and commercial projects, employing professionals in the implementation and planning of multi-billion-dollar projects. It continues to be competitive in overseas markets, maintaining a high reputation for work quality.
Several AEC sub-sectors concentrate on particular types of design and construction projects, such as transportation/infrastructure, health care (such as hospitals and medical facilities), industrial, and entertainment (such as convention centers and amusement parks).
Drivers of Demand for Architecture, Engineering, and Construction Services
Worldwide, there are four primary factors that drive the demand for AEC services. These factors include urbanization, population growth, political risk, and petroleum prices. In the public utilities sector, especially with regards to privatization and outsourcing, government spending, capital costs, corporate revenues, and economic growth are also factors that affect the demand for AEC services.
Domestic Regulatory Environment
In the United States, certifications for professionals in the construction, engineering, and architecture industries are typically regulated at the national level. These certifications, such as green building safety certifications, construction management certifications, and various other certifications, require at least 3 to 4 years of continuing education, initial examination registration, and passing the examination. Professionals certified in these fields, such as professional engineers and architects, often need to have at least 4 years of college education. Additionally, there is guidance available for these professionals under the certification requirements.
International Environment
Tax treatment and profits of repatriation, as well as banking issues, requirements for commercial structure and locality, are common barriers for firms operating in a foreign market. Additionally, there are restrictions on the movement of professional personnel under the immigration laws of the country, including requirements for nationality and AEC certification. Other barriers to market access include certification requirements for engineering and architecture organizations at the state level, which can often be difficult, if not impossible, to achieve at the national level. In some cases, arrangements may be made on a case-by-case basis or hiring/contracting with local professionals may be chosen to address this requirement in order to work on projects in foreign markets. Many foreign countries have their own professional licensing/certification requirements for AEC professionals working on projects in their market, which creates barriers for service providers in the AEC industry. These barriers are typically regulatory in nature in foreign markets.
Trade in Architecture, Engineering and Construction Services
Engineering services dominated the trade in 2019, accounting for over 70 percent (by value) of exports. The imports amounted to $8.34 billion, while the U.S. AEC services exports stood at $15.86 billion in the same year. Consequently, the trade surplus in AEC services reached $7.52 billion in 2019. Since 2010, the United States has consistently maintained a surplus in the trade of AEC services.
Africa and Latin America are the primary markets for construction services, with the Asia-Pacific region and Europe being the main regional markets for architecture and engineering services. The top export markets for AEC services differ across regions, depending on the specific sub-sector.
Architectural Services
In the past ten years, the United States has experienced a trade surplus of approximately $100 to $200 million in architectural services, while recording exports worth more than $1 billion in 2019.
With a value exceeding $170 million, Europe emerged as the second most significant export market, constituting 16 percent of U.S. Exports. The Asia-Pacific region, on the other hand, witnessed the provision of over $625 million worth of architectural services, making up nearly 60 percent of the total U.S. Exports in 2019.
U.S. Imports account for 35 percent of European service providers’ second-closest imports, representing the largest percentage (42 percent) of service providers’ imports from the Pacific-Asia region.
Engineering Services
In the year 2019, the total value of goods and services sold to other countries exceeded $11.6 billion, leading to a trade surplus in the United States of over $4 billion. The export of engineering services constitutes the biggest portion of AEC’s international trade, accounting for over 70 percent of all AEC exports.
In 2019, the largest markets for U.S. Engineering services providers were the United Kingdom (amounting to $1.4 billion), Canada (amounting to $871 million), France (amounting to $639 million), Korea (amounting to $602 million), and Switzerland (amounting to $589 million).
In 2019, the Asia-Pacific engineering service providers accounted for over 40 percent of the imported goods, with an import worth of nearly $3 billion. The imports mainly originated from Canada and Europe and were valued at approximately $3.5 billion. The Asia-Pacific region constituted 27 percent of the total U.S. Exports, which were valued at more than $3 billion in 2019. In terms of regions, Europe and the Asia-Pacific region are the primary trading partners for engineering services, with exports to Europe valued at over $5.3 billion, representing 46 percent of the total exports.
Construction Services
The U.S. Construction services sector, encompassing services like construction management, planning, and safety-related services, witnessed a consistent growth in exports over the past four years, reaching one of its highest export levels in 2019, amounting to nearly $3.2 billion. In contrast, imports have maintained a stable value of approximately $1 billion during the past decade.
Conversely, the majority of construction services imports originated from Canada, with Europe and the Asia-Pacific region following suit. European markets received exports worth over $1 billion. In terms of regions, U.S. Exports were mainly directed towards Africa and Latin America, accounting for nearly half of the total exports, valued at approximately $1.5 billion in 2019.
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ITA Resources
Jasun Moy.
Architecture, Engineering, Construction, and Design Services can be contacted at Jasun.Moy@trade.Gov.
202.744.9722.
