The construction and engineering industry includes companies that deal with the design, planning, construction, and management of infrastructure and industrial projects. They cater to the government, power, and petrochemical end markets. Construction and engineering companies generate revenue from engineering, procurement, and construction (EPC) and operations and maintenance activities. Below is current consensus forecast data on revenue drivers, such as backlog value, burn rate, net order value and book-to-bill ratio; and financial metrics, such as total engineering, procurement and construction (EPC) revenue and total operations and maintenance revenue.. These key construction and engineering metrics aid market participants in identifying construction and engineering trends and future performance of companies, including China Railway Group, Hyundai E&C, Larsen & Toubro and more.
What are the most important construction & engineering KPIs?
Key performance indicators (KPIs) are the most important business metrics for a particular industry and are where investors should look to find an investment edge. When understanding market expectations for construction and engineering , whether at a company or industry level, here are some of the construction and engineering KPIs to consider:
- Backlog value
- Burn rate
- Net order value
- Book-to-bill ratio
- Total engineering, procurement and construction revenue
- Total operations & maintenance revenue
- Total construction & engineering revenue
- Total cost and expenses
- Operating income/(loss)
What questions do these key construction & engineering metrics answer?
Here are some questions you can answer with Visible Alpha’s construction and engineering forecast data:
- Which construction companies have the highest value of projects in the pipeline?
- Which construction companies are burning their backlog faster?
- Which construction companies have the highest value of new orders/projects?
- Which construction companies are leading by demand?
- Which construction companies are leading by revenue?
How can this data be used?
By opening up forecast data on key construction and engineering KPIs, Visible Alpha is enabling institutional investors, retail investors, business reporters, students and more to quantify and compare market expectations for companies across the construction and engineering industry.
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Backlog value is the total amount of revenue expected to be generated from contracts that have been awarded to a company. Backlog in construction & engineering (C&E) industry is a measure of the total dollar value of work to be performed on contracts awarded and work in progress.
Burn rate is a rate calculated by dividing the current quarter’s revenue by the current quarter’s beginning backlog. It represents how much of a backlog a company is able to convert into revenue.
Net Order Value
Orders in the C&E industry represent the value of new projects received by a company.
Book to bill ratio is the ratio of new orders to completed sales.
Total EPC Revenue
Total EPC revenue includes all revenue generated from engineering, procurement, and construction.
- Engineering includes conceptual architecture/engineering and designs
- Procurement includes purchasing, materials management, inspection, and logistics. It generally accounts for 30-40% of total capital expenditures of any project.
- Construction includes hiring and training employees, sub-contracts management, and an extensive support organization for systems, equipment, and tools
Total Operations & Maintenance Revenue
Total revenue from operation and maintenance includes an array of classified and unclassified services, both directly and through joint ventures or similar partner arrangements, such as:
- Operation and maintenance of complex government installations, including military bases and test ranges
- Network and communications engineering, software engineering, IT infrastructure design and implementation, cyber defense and cloud computing technologies
- Deactivation, decommissioning, and disposal of nuclear and high hazard waste
- Testing and development of new components and platforms, as well as engineering and technical support for the modernization of aging weapon systems
- Logistics support for government supply and distribution networks
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