What We're Reading

New Home Sales Rise To Highest Level This Year1

National Association of Home Builders 6/25/2018

Sales of newly built, single-family homes rose 7% in May to a seasonally adjusted annual rate of 689,000 units after a downwardly revised April report, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the second-highest sales report since the Great Recession. “Sales numbers continue to grow, spurred on by rising home equity, job growth and reports of a greater number of millennials entering the single-family housing market,” said NAHB Chairman Randy Noel.

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90% Of Contractors Face Labor Challenges2

Construction Dive 6/8/2018

In their Q2 2018 United States Gypsum (USG) + U.S. Chamber of Commerce Commercial Construction Index (CCI), the two organizations said that 9 out of 10 contractors are concerned about the ongoing labor shortage, marking the fourth consecutive quarter that construction companies have expressed apprehension about being able to find enough qualified workers. In addition, 47% of contractors surveyed for the report expected their ability to find adequate labor to diminish during the next six months.

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Homebuilder Sentiment Drops In June Due To Soaring Lumber Costs3 

CNBC 6/18/2018

U.S. homebuilders are thrilled with demand for housing, but they say they are being hamstrung by rising costs for lumber. Builder sentiment fell 2 points to 68 in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The index stood at 66 last June. A reading above 50 is considered positive sentiment. Builder sentiment has been mostly in the 70s since December, except for one dip in April, when mortgage rates took a sizable jump. This time, the weakness is all about the spike in material prices.

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More Tariffs Will Hurt Construction, Other Industries2

Construction Dive 6/21/2018

The Association of Equipment Manufacturers has come out against White House threats to impose an additional $200 billion of tariffs on goods imported from China. Dennis Slater, association president, said new tariffs imposed by both countries will hurt those who manufacture construction and other types of equipment and that more than one million jobs are at stake. Last Friday, President Donald Trump's administration established an additional $50 billion in tariffs on goods — including construction equipment — from China, which responded by issuing $50 billion of its own tariffs on U.S. goods.

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Construction Costs Soar In May, Outpacing Contractors’ Pricing4

Associated General Contractors of America 6/13/2018

Construction costs accelerated again 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, according to an analysis by the Associated General Contractors of America of new Labor Department data. Association officials say that the construction industry will bear a heavy share of the tariffs’ costs.

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Public Markets5


*Calculated as (EBITDA – Capex) / EBITDA

Public Comparables5

Building Products & Services

As of June 30, 2018


Building Products Distributors 

As of June 30, 2018


Construction Materials

As of June 30, 2018



Relevant Transactions5





Representative Building Products & Materials Transactions



2. Construction Dive


4. Associated General Contractors of America

5. Factset