Direct Answer
31 SEC filers are classified under the Standard Industrial Classification codes that describe the construction & engineering industry, and their latest annual reports show $141.7 billion of combined revenue and a median operating margin of 6.1%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Construction and engineering firms plan and build infrastructure, industrial plants and buildings for public and private clients. Backlog and contract mix drive results, and fixed-price work carries risk. The first numbers to compare across companies here are backlog and book-to-bill, gross margin by contract type and cash conversion.
Key Industry Metrics
- Backlog and book-to-bill: Contracted work not yet completed, and new awards compared with revenue earned. A ratio above one means the pipeline is expanding, though backlog quality matters as much as size.
- Gross margin by contract type: Profit split among fixed-price, cost-plus and unit-price contracts. Cost-plus carries less risk but lower margin, so the mix shows how exposed results are to overruns.
- Cash conversion: How much of reported profit becomes operating cash after working capital. Weak conversion often points to slow customer payments or large unbilled balances.
- Project mix: Split of work among types such as utilities, energy, transportation and industrial. It shows cyclical exposure and which funding sources drive demand.
- Claims and change orders: Requests for extra payment for added scope or unexpected conditions. Unresolved claims mean revenue and margins are uncertain, so large ones can cause later write-downs.
Primary Macro Drivers
- Infrastructure funding: Public programs pay for roads, water, transit and utilities, so appropriations feed awards and backlog.
- Industrial and energy capital spending: Owners commit capital to plants and energy projects, adding private awards and supporting book-to-bill.
- Labor and materials costs: Wages and material prices are the main project costs, so changes move gross margin, especially on fixed-price work.
- Interest rates: Higher rates raise financing cost for owners, delaying or shrinking projects and slowing awards.
Major Risks
- Fixed-price overruns: Cost above the bid comes straight out of margin and can force write-downs; watch gross margin by contract type and claims.
- Project delays: Late schedules defer revenue and tie up cash; watch cash conversion and backlog conversion.
- Customer concentration: A few clients can dominate backlog, so one cancellation or delay moves results; watch top-customer share.
- Labor shortages: Too few skilled workers raise wages and slow progress, lowering margin and extending schedules.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Cyclical |
| Capital Intensity | Medium |
| Regulatory Intensity | Medium |
| Industry Maturity | Mature |
| Geographic Importance | U.S. / Global |
Construction & Engineering Filers in the SEC Record
31 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 1600, 1623, 1700, 1731, 8711. Their latest fiscal years end between 2024 and 2026, and together they reported $141.7 billion of revenue. Median revenue growth over the prior year was 14.4%. Median operating margin was 6.1% and median net margin 3.0%. Median total liabilities were 66% of total assets, and 20 of 30 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Quanta Services, Inc. | $28.5 billion | 20.3% | 5.7% | 3.7% | FY 2025 |
| Emcor Group, Inc. | $17.0 billion | 16.6% | 10.1% | 7.5% | FY 2025 |
| Aecom | $16.1 billion | 0.2% | 6.4% | 3.5% | FY 2025 |
| Fluor Corp | $15.5 billion | -5.0% | -2.4% | -0.3% | FY 2025 |
| Mastec Inc | $14.3 billion | 16.2% | n/a | 2.8% | FY 2025 |
| Jacobs Solutions Inc. | $12.0 billion | 4.6% | 7.2% | 2.4% | FY 2025 |
| Kbr, Inc. | $7.8 billion | 1.0% | 10.0% | 5.3% | FY 2026 |
| Dycom Industries Inc | $5.5 billion | 17.9% | n/a | 5.1% | FY 2026 |
The 8 largest of 31 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Construction & Engineering guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
More in Industrials
- Industrials sector overview
- Construction Fasteners
- Commercial Services & Supplies
- Construction Machinery
- Commercial Satellites
- Container Shipping
- Commercial Printing
- Contract Logistics
- Commercial & Professional Services
Put it to work
Frequently Asked Questions
What are the main KPIs for the Construction & Engineering industry?
Key performance indicators for the Construction & Engineering industry include: Backlog and book-to-bill, Gross margin by contract type, Cash conversion, Project mix, Claims and change orders. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Construction & Engineering industry?
The Construction & Engineering industry is cyclical, meaning its revenues and earnings tend to expand during economic expansions and contract during downturns. Investors should monitor leading economic indicators and interest rate trends when evaluating timing.
What are the biggest risks in the Construction & Engineering industry?
The primary risks for Construction & Engineering companies include: Fixed-price overruns, Project delays, Customer concentration, Labor shortages. Investors should assess each company's exposure to these factors and its track record of navigating them.