<img src="https://d5nxst8fruw4z.cloudfront.net/atrk.gif?account=n/CSo1IWx810Y8" style="display:none" height="1" width="1" alt="">

Industrial and Construction Services News

Employers Add Jobs, Raise Salaries in Tight Labor Pool

According to the Associated General Contractors of America, construction employment increased by 17,000 jobs in April and 257,000 jobs over the past year while firms boosted pay to help recruit new workers. Construction employment is at its highest level since 2008. Hourly earnings averaged $29.63 in April, up 3.5% from a year earlier. “Many firms are boosting pay and taking other steps to compete for a relatively small pool of available, qualified workers to hire,” said AGC CEO Stephen E. Sandherr.

Tight Labor Pool

Construction Costs Soar in May, Contractors' Pricing; New Tariffs to Worsen Cost Squeeze

Construction costs accelerated in May with steep increases for a wide range of building and road materials, including many that are subject to tariffs that could drive prices still higher. The producer price index for inputs to construction industries rose 2.2% in May alone and 8.8% over 12 months. The tariffs have delivered a surge of orders that mills say exceeds current capacity, a situation that threatens to produce construction delays, budget problems, and possibly cancellations for future projects.

Tariffs and Rising Costs

2018-2019 Vertical Market Series: Construction 

In a report recently released by the Equipment Leasing and Finance Foundation, equipment distributors and rental companies reported growth in volume, with over 55% indicating their intention to expand. “What we expect from the rental industry is they will increase the size of rental fleets, as they’re saying demand for rental will continue to grow. But as a result, there probably won’t be a significant ability to put higher prices out there,” explained John Crum, head of the construction group at Wells Fargo.

Vertical Market Series 

Industrial and Construction Services Transactions

April 2018 – H&E Equipment Services Completes Acquisition of Rental Inc.

H&E Equipment Services announced it has completed its acquisition of Rental Inc., a non-residential construction-focused equipment rental company with five branches in Alabama and Florida and assets including approximately $35 million of fleet based on original equipment cost.

May 2018 –  Privet Fund Management Completes Acquisition of Hardinge Inc.

Privet Fund Management has completed its acquisition of Hardinge Inc., an international provider of advanced metal-cutting solutions and accessories based in Berwyn, Pennsylvania. Privet acquired all shares of Hardinge stock at $18.50 per share in cash, leading to a transaction value of approximately $245 million.

June 2018 –  Clopay Building Products Acquires CornellCookson, Inc.

Clopay Building Products, a subsidiary of Griffon Corporation, has acquired CornellCookson for $180 million. CornellCookson is a manufacturer and marketer of rolling steel door and grille products designed for commercial, industrial, institutional, and retail use.

TKO Miller Market Analysis

  • TKO Miller is seeing continued high valuations and an abundant use of debt. Despite a slight regression from the record 8.1X middle market valuation multiple in the fourth quarter of 2017, middle market industrial service businesses continue to transact as the demand from private equity and strategic buyers remains high.
  • U.S. industrial production continued to ramp up in May, as mining output rose by 1.8% and utilities production rose 1.1%. Compared with May 2017, overall industrial production was up 3.5%.
  • The recently imposed tariffs of 25% and 10% on steel and aluminum, respectively, are likely to continue to drive rising domestic metal prices. While it is expected that steel production and prices will rise dramatically in the short run, the response from domestic aluminum producers is expected to be more measured as production of raw aluminum in the U.S. has been steadily declining for decades. The tariff will most likely be reflected in the delivery premium U.S. aluminum consumers pay to producers, which is up about 6% from last year to $0.15 cents per pound.
 
Middle Market Valuation Multiples

 MMV Q2

 
Industrial and Construction Services Valuation Index

ICSV Q2

 

You May Be Interested In:

 

New Call-to-action
bg-img14.jpg

Join Our Newsletter

Join over 2,000 other marketing pros in subscribing to the award-winning our Blog.

Executive-on-cruise.jpg
eBook - Tips - Sell Business copy.png

DON'T LEAVE MILLIONS ON THE TABLE

Download our Free eBook for practical knowledge on making the most important sale you will ever make.

Download Now

Leave a comment

Popular Articles

Recent Articles