Published by E&P

Global capital project consulting company Independent Project Analysis Inc. (IPA) forecasts that the demand for megaproject developments will have a high-rate increase in the next few years, putting a strain on engineering firms, suppliers, and construction resources.

The study predicts megaproject spending, driven mainly by global demand, will increase around 30% a year, which is a faster rate than in the boom period from 2005 to 2008. The demand is expected to increase heavily in emerging countries such as China, India, and Brazil, as well as the Middle East region. Efforts in the future could also mean megaproject developments offshore.

These findings are based on analysis of verified megaproject development announcements and information available in its proprietary capital projects database. According to IPA, the study develops an expenditure profile of megaproject developments with expenditures separated into engineering services, bulk materials, major equipment, and construction activities. It states that there are not a lot of resources to support these megaproject developments, most of which are based in “Tier 1” contractors and major equipment vendors.