Major projects in the oil and gas sector and increased investments in public infrastructure combined to bring engineering services revenue to their highest level in four years in 2019.

Statistics Canada reports that the combined operating revenue of the country’s engineering services companies reached $31.8 billion for the year—an increase of 12.6 percent over 2018.

Although overall demand for services in the oil and gas extraction industry has been on a downward trend since 2014, major projects in the liquified natural gas industry in Western Canada helped boost revenues. Operating revenues in British Columbia grew by nearly 33 percent while they increased by more than 17 percent in Alberta.

Outside the oil and gas extraction and mining sector, investment in public infrastructure continued to support demand for engineering services in Ontario and Quebec. Operating revenue grew by 6.0 percent in Ontario and 5.9 percent in Quebec in 2019.

Operating expenses rebounded by 12.9 percent to $28.7 billion in 2019, resulting in an operating profit margin of 9.6 percent—down from 9.9 percent in 2018. Salaries, wages, commissions and benefits, which accounted for about 48 percent of companies’ operating expenses, totalled just under $14 billion in 2019. Those costs have been trending upwards since 2013—in part due to strong demand for skilled workers.

At just over 17 percent, the cost of goods sold was the second-highest operating expense.

Engineering services relating to mining and metallurgical plant and processing projects accounted for 12.2 percent of total sales in 2019, up from 6.3 percent of sales in 2018. Other types of engineering services were more stable.

Clients in the business sector made up 65.0 percent of sales in the engineering services industry in 2019, while governments and public institutions accounted for 22.2 percent. Customers outside Canada accounted for 9.9 percent of sales in 2019, down from 11.2 percent in 2018. Foreign sales were almost evenly split between the United States (48 percent) and all other countries (52 percent).