Footnotes
- Valuation Multiples represent Enterprise Value to LTM Revenue and LTM EBITDA at 7/31/2022
Engineering & Construction Services Industry Update Q2 2022
Read more about M&A trends and activity in this sector
Engineering and Construction Services Sector Update - September
Download PDFEngineering & Construction Overview
Global professional services industry participants include providers of consulting services, on-shore and off-shore outsourced solutions, data and information services, human capital management and workforce solutions, and risk and compliance services. Key public industry players in each sub-sector are categorized as follows:
| Sub-Sector | Public Revenue / EBITDA Multiple (1) | Description | Key Select Industry Leadership | |
|---|---|---|---|---|
| Construction Contractors | 0.27x / 7.9x | Providers of construction and general contracting services |
|
|
Diversified Engineering and Construction
| 1.00x / 15.5x | Professional services firms offering a range of engineering, construction, and construction management services |
|
|
| Infrastructure Services | 0.65x / 14.1x | Civil, infrastructure construction and engineering services |
|
|
| Specialty Engineering and Construction | 1.10x / 12.2x | Electrical, mechanical, industrial, and environment engineering and construction services |
|
|
| Utility Services | 0.82x / 10.9x | Electric power, energy, and utility engineering and construction services |
|
|
Sector Perspectives: Key Demand Drivers of Continued Infrastructure Investment
- In Q3 2022, the Associated Builders and Contractors announced a construction backlog indicator at 9.0 months, slightly higher than previous quarter
- Despite the continued shortage of skilled workforce, increased materials prices, rising interest rates and volatile public markets back drop, the industry is anticipated to experience stronger demand in Q3-2022
Notable trends
- The industry has responded very well throughout the pandemic, as construction spending is approximately 12% higher than 2019 levels
- Pandemic-induced supply shortages have persisted, affecting the cost of key construction materials such as lumber, paint and coatings, aluminum, steel, and cement – these sourcing challenges will continue to disrupt project delivery and margins
- The industry is expected to benefit mainly from an increased focus on additional infrastructure investment:
- Signing of the Bipartisan Infrastructure Law will allocate $1.2 trillion in total funding to infrastructure projects over the next ten years, including $550 billion in the upcoming five years,
- It is expected there will be an infrastructure spending gap of ~$2.6 trillion by 2029, representing a 24% increase over the 2010-2019 period (Funded Investment: $3,350 billion, Total Investment Needs: $5,938 billion)
- Residential construction activity is expected to be supported by continued demand for single- and multi-family homes
Total Gross Investment in U.S. Infrastructure (2016 – 2020) ( $ in Billions)
The gross investment in U.S. total Infrastructure grew at a CAGR of 3.8% between 2016 – 2020
We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.
Share
Download the document:
Engineering and Construction Services Sector Update - September
Download PDFMeet our team
In today’s market, you need an advisor with objective insight at every step of the transaction process. We work with you throughout the full deal cycle to create value and successfully execute your deal strategy.
Stephen Guy
Managing Director, KPMG Corporate Finance LLC
Stephen Guy
Managing Director, KPMG Corporate Finance LLC