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

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Engineering & 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-SectorPublic Revenue / EBITDA Multiple (1)DescriptionKey Select Industry Leadership
Construction Contractors0.27x / 7.9xProviders of construction and general contracting services
  • Actividades de Construcción y Servicios, S.A.
  • Aecon Group
  • Skanska AB
  • Tutor Perini Corporation
Diversified Engineering and Construction
1.00x / 15.5xProfessional services firms offering a range of engineering, construction, and construction management services
  • Arcadis
  • Bouygues SA
  • HOCHTIEF Aktiengesellschaft
  • Jacobs Engineering
  • KBR
  • Obayashi Corporation
  • Shikun& Binui
  • SNC-Lavalin Group
  • Stantec
  • Webuild
Infrastructure Services0.65x / 14.1xCivil, infrastructure construction and engineering services
  • Balfour Beatty
  • Construction Partners
  • Granite Construction
  • Sterling Construction
Specialty Engineering and Construction1.10x / 12.2xElectrical, mechanical, industrial, and environment engineering and construction services
  • APiGroup
  • Bilfinger SE
  • Clean Harbors
  • Comfort Systems USA
  • Dycom Industries
  • EMCOR Group
  • John Wood Group
  • Tetra Tech
Utility Services0.82x / 10.9x
Electric power, energy, and utility engineering and construction services
  • MasTec
  • MYR Group
  • Primoris Services
  • Quanta 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.


  1. Valuation Multiples represent Enterprise Value to LTM Revenue and LTM EBITDA at 7/31/2022

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Engineering and Construction Services Sector Update - September

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Stephen Guy
Managing Director, KPMG Corporate Finance LLC

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