Environmental Professional Services Sector Still Struggling in Northeast U.S.

13% of Sector Closed Between 1997-1999

Contact: Cary Perket Jeremy Yogerst

858/488-4760 612/831-2473, ext. 14

February 15, 2000 — For Immediate Release

Edina, MN - The Environmental Information (EI) Database Services Group, which maintains what is widely recognized as the nation’s most comprehensive database on environmental services in the United States, announced the findings of its research on trends within the environmental consulting sector.

EI found that 13 percent of 1,139 surveyed environmental service firms listed in the 1997 Northeast Directory (EPA Regions 1,2, & 3) had closed. A majority (60%) of the closures were among firms with less than 50 employees. Some of the larger firms (those companies with more than 50 employees) closed offices in the Northeastern United states, but only 16 were identified as having gone completely out of business.

"Following the trend of previous surveys, there has been a continuation in the closing of small firms," states EI Analyst Jeremy Yogerst. "This closing is indicative of market maturation and stabilization. The larger, diverse firms are better able to satisfy more customer demands, making it ‘one-stop shopping’ for necessary services."

The latest survey findings reflect similar trends to the Midwest survey completed earlier in 1999:

% Closure of Environmental Service Providers in Individual EPA Regions

EPA Region ‘99-‘97 ‘97-‘95 ‘95-‘93

Region 1 (CT, ME, MA, NH, RI, VT) 17% 10.3% 33%

Region 2 (NJ, NY) 11% 5% 33%

Region 3 (DC, DE, MD, PA, VA, WV) 12.2% 7.6% 20.8%

Region 5 (IL, IN, MI, MN, OH, WI) 16% 12% 32%

"These smaller firms are probably a better harbinger of environmental market demand trends. I would personally interpret the trends as indicating continuing environmental market contraction," comments EI’s Senior Analyst Cary Perket. "Conservative estimates for the

combined closures in the Midwest and Northeast over the last two years would have represented approximately $700 million to $1 billion dollars in gross revenues. As a result, the remaining firms have had an opportunity to expand their market share."

"It is becoming increasingly difficult to judge market trends in the environmental services sector through the performance of larger publicly held environmental firms. Traditionally ‘pure’ environmental firms have diversified into other markets, including infrastructure and telecommunications," says EI’s Perket. "However, one expects that the environmental services of these firms will continue to benefit from the closure of the smaller ‘pure’ environmental service firms."

One trend through the entire survey period (1993 - 1999) has been that the majority of responding firms have less than 25 employees and were over seven years old. There may be some bias to this statistic as over half of firms in the database claim to be founded over 15 years ago. Because of industry trends towards consolidation and market maturation, EI research continues to add environmental firms, but has uncovered relatively few new environmental services firms entering the market. Less than one percent of the 1,231 environmental service firms in our current Northeast database are less than 3 years old.

Environmental Information, Ltd. began surveying the environmental services sector in 1983. The individual surveys of each firm’s services/offerings are published in the EI Environmental Services Directory, which contains approximately 7,500 companies offering environmental services (companies include consultants, spill response firms, remediation firms, hazardous and municipal solid waste facilities, and laboratories) and requires five – three inch binders. It is the largest and oldest ongoing directory of environmental services in North America.

Further information for these services is available on Envirobiz (http://www.envirobiz.com). Envirobiz is a leading environmental Internet site and web host for proprietary database, information, newsletter, and research services for the environmental professional. Environmental Information Limited has provided proprietary subscription-based and custom research on the marketplace for environmental services and technology since 1983. For more information on Envirobiz or Environmental Information Research Services, call 612/831-2473, fax 612/831-6550, or e-mail ei@mr.net. Environmental Information is located at 7301 Ohms Lane, Suite 460, Edina, MN 55439.

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