M/E/P & structural firms are busier than ever
The pace of industry M&A continues to increase each week – now up 9% year-over-year.
The A/E industry is humming. The engines of infrastructure, environmental and site/civil firms have been running hot for over a year. M/E/P & structural firms are busier than ever designing data centers, distribution facilities, EV factories, and launch pads to support a new economy fashioned by Musk and Bezos. The demand for laboratories and research facilities is buoying architecture and interiors firms that are concurrently seeing their dormant hospitality and entertainment sectors roar back to life. There’s a LOT of positivity going around. And a great way to quickly assess the state of the market is through the eyes of the industry’s publicly-traded firms.
- A unique perspective: The quarterly reports of the industry’s publicly-traded firms provide a timely opportunity for their investors to view their performance. In doing so they also give us a close-to-real-time proxy of industry activity and outlook. The most recent crop of reports augurs well for another robust year for the broader A/E Industry.
- And now from Hollywood….Florida: On Wednesday, fast-growing industry leader NV5 Global, Inc. (NASDAQ: NVEE) reported “strong first quarter results” and “record cash flows.” Per CEO (and civil engineer) Dickerson Wright “we anticipate increased growth opportunities as the economy continues to open throughout the year.” Demand for NV5’s utility, infrastructure, and public sector services drove a 5% increase in the firm’s backlog for the quarter – a positive indicator for the health of the industry.
- Water water everywhere: At the end of April, Tetra Tech Inc. (NASDAQ: TTEK) — ranked #1 in Water by ENR for 18 years in a row– reported “strong second quarter results” with “record second quarter revenue and operating income” in both its government and commercial businesses. The company’s backlog increased 5% year-over-year – more good news for the industry.
- From north of the border: Montreal to be precis. On Wednesday, WSP Global, Inc. (TSX: WSP) reported a “strong start to the year” with “…adjusted EBITDA up 10.3%…” The company’s management expects “…organic growth to be in the low-to-mid single digit range for Q2..” Importantly, “backlog grew organically by 1.7% compared to backlog as of December 31, 2020.”
- More good news from the north: On May 5, Stantec (TSX, NYSE:STN) reported “solid first quarter results” and again encouragingly for the rest of the industry “5.8% organic backlog growth.” Per the firm’s report, “organic backlog growth was achieved across all business units, including Buildings, and with double-digit growth in Energy & Resources and Environmental Services.”
- Meer goed nieuws from across the pond: On April 20, Arcadis (EURONEXT: ARCAD) reported “strong first quarter results” and “organic backlog growth at 3% quarter-to-date.” The “main drivers” of the firm’s first quarter “are the strong performance in North America and the UK.”
- This market is moving FAST: Consider that in Q3 2020, many of the publicly-traded firms in our industry were unclear as to where the market was headed (kind of like the rest of us). Now, there is great confidence in the resiliency of their business models – proven through the pandemic – the importance of their work (being essential businesses is reaffirming) – and the outlook for their end markets (they will benefit from any U.S. infrastructure bill that passes – even the skinniest one.)
This article originally appeared on Morrissey Goodale’s website. Morrissey Goodale is a CFE Media content partner.
Original content can be found at www.morrisseygoodale.com.
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