SHAW

Image Source: CBI Structure of the Engineering & Construction Industry Firms in the E&C industry design and construct facilities for customers across a variety of end markets. Participants generally have slim margins and use percentage-of-completion accounting, which can cause wild swings in profitability, especially on fixed-priced contracts when cost overruns occur. Firms that operate primarily under cost-reimbursable contracts tend to have lower risk profiles. Still, order trends can be volatile, and cash flow depends on projects in cyclical industries. Competition remains fierce, and industry consolidation won’t change existing rivalries much. We generally don’t like the group. We’ve optimized our coverage of industrial firms. They can be found here.