Insight

Engineering & Construction market update: Q4 2020

KPMG Corporate Finance LLC’s Q4 Engineering & Construction M&A update

Stephen Guy

Stephen Guy

Managing Director, KPMG Corporate Finance LLC

+1 410-949-8909

U.S. Engineering & Construction market overview

Insight
  • As of Nov. 2020, YTD non-residential construction spending and spending in water supply and power sectors have increased YoY relative to 2019 levels
  • Non-residential construction spending is up 4.0% as of Nov. 2020 relative to 2019 spending, and construction spending in water supply and power sectors are update 12.4% and 19.7%, respectively
  • In Q4 2020, the Associated Builders and Contractors construction backlog indicator fell 2.7% during the quarter to 7.3 months and is down 17.1% relative to Q4 2019
  • An increase in the postponement or delay of major construction projects has been the driving force in the decline of the Associated Builders and Contractors construction backlog in 2020 and is a direct result of the lasting effects of the COVID-19 global pandemic in the U.S.
  • Despite a weak short-term outlook, it is anticipated construction backlog will rebound in 2021 due to the increasing availability of COVID-19 vaccines and that delays or postponements of major construction projects are expected to be temporary

Construction backlog(1)


Non-residential construction spending


Construction spending by sector

Footnotes

(1) Associated Builders and Contractors, Construction Backlog Indicator.

* Denotes % change in aggregate construction spending for YTD November, on year-on-year basis.

Source: S&P Capital IQ, Associated Builders and Contractors, and wall street research.


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