Average EV/EBITDA Multiples in the Construction Sector Rise
According to Statista, the average EV/EBIDTA–earnings before interest, tax, depreciation and amortization—multiples in the construction sector in the U.S. from 2019 to 2021, has increased for building materials, retail (building supply), engineering/construction, and homebuilding.
According to Deloitte, construction earnings before interest and tax (EBIT) account for 5.5% of a company’s sales. That's not a lot of room for unplanned expenses.
To make matters worse, the cost of building materials, such as concrete and brick, is set to rise. With the price of goods increasing in 2022, construction companies need to look long and hard at areas that can be optimized to drive a better bottom line.
How Can You Prepare?
Whether it’s negotiating prices with suppliers or automating sales workflows, construction companies need to prioritize efficiency and cost-saving opportunities to succeed.
To ensure profitability, you need to consider how fluctuating material costs will impact your:
- Estimates and quotes
Work closely with us to help you identify and monitor how these changes might impact your bottom line. Let's build a plan together. Call us today.