Fortune tellers keen on construction

By Staff | October 31, 2013 | Last updated on October 31, 2013
2 min read

The majority of companies in the global engineering and construction sectors have fresh optimism and anticipate further growth across the industry, according to KPMG’s Global Construction Survey.

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After prolonged economic uncertainty, companies are experiencing a general increase in backlogs and margins, showing an overall positive outlook in the industry.

The survey found that:

  • Just over 50% of respondents from the Americas; Europe, Middle East and Africa (EMEA); and Asia-Pacific (AsPac) regions say their companies experienced a backlog increase of at least 5% from 2012 to 2013.
  • Though margins are not rising at the same rate as backlogs, 80% of respondents say their margins will either remain stable or increase more than 2% in the same period.
  • In Canada, the majority of respondents cite:
    • A reported backlog increase of more than 10% in 2012, as compared to the end of 2011.
    • Stable profit margins at the end of 2012 (compared to 2011).
    • Stability in 2013 volume of orders (compared to 2012).
    • Anticipated/proposed margin rate when bidding in current tenders in 2012.

While the survey shows optimism across the industry, there are still barriers to growth:

  • The industry is heavily reliant on national governments’ infrastructure plans for future growth, with two-thirds of respondents citing this as the single most important market driver.
  • Risk management continues to remains a challenge for the sector.
    • Heavy investments in risk management over the past decade are paying off with the majority of respondents saying their risk management programs have improved project performance. However, 77% claim the existence of underperforming projects are due to project delays, poor estimating practices and failed risk management processes.

The global and Canadian landscape is enthusiastic about the industry but there is a sense of realism to forward planning with many feeling that growth may take several years.

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The staff of have been covering news for financial advisors since 1998.