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INDUSTRY OVERVIEW

The US construction industry comprises 3.3 million businesses providing employment to over 9.4 million Americans and generating a combined annual revenue of $2 trillion. Sectors within the industry include: building construction (builders and contractors), heavy construction (infrastructure) and special trade contractors (plumbing, HVAC, painting, electrical, masonry, carpentry, roofing, concrete, water well drilling, structural, glass work, excavation and demolition).

The companies holding the largest market share in industry include DR Horton Inc., Turner Construction Company, AECOM, Fluor Corporation and EMCOR Group Inc.

The construction industry added more than $900 billion to the US economy in the first quarter of 2020—its highest level since the 2008 recession. It employed 7.64 million people in February 2020, also the highest levels since 2008. Then, COVID-19 reached the United States, causing the industry to lose $60.9 billion in GDP and decreasing total jobs to roughly 6.5 million, effectively wiping out two years of GDP gains and four years of job gains.

TRENDS & CHALLENGES

Globalization has opened  the market frontiers to manufacturing, creating both opportunities and challenges for US manufacturers. While the manufacturing of high volume low cost goods has generally moved overseas, US manufacturers are still excelling in the delivery of technical and specialized manufactured goods. Managing far-flung supply chains and distribution channels poses persistent challenges. Meanwhile, improved operational efficiency has accelerated product development, design, production, distribution and  marketing, while shortening the sales cycle. 

FORECAST

Even before the Pandemic, the manufacturing industry was trying to regain momentum from a general exodus to lower-cost markets. Looking ahead to 2021, the recovery may take longer than expected, with a moderate growth forecasted at 3.5%.

Agility is key to the resilience of the manufacturing industry. Opportunities lie in its transformation: digital investment, supply chain resilience, agility in its operations and adaptation to the new workplace.

key performance indicators

EBITDA multiple

SALES multiple

These key performance indicators are based on industry averages for a company with $10 million in revenue. The KPIs are not specific to the operational performance of your company or your sub-sector. 

The information contained has been obtained from different sources deemed reliable, including DealStats, Deloitte, Dun & Bradstreet and Business Reference Guide. PBB does not make any representation or warranty as to the accuracy of the data.

  • COGS: 40 to 60%
  • labor costs: 10 to 20%
  • net margin: 5 to 15%

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