AUSTRALIAN CONSTRUCTION GROWTH RATIOS: INDUSTRY AND COMPANY ANALYSES

Many investors consider the construction industry risky, with fluctuating rather than stable performance, and greater than average insolvencies. These views may reduce investors' appetite to invest in shares of construction companies. In this light, this paper presents research into and analysis of construction growth, both from an industry and company perspective within Australia. The industry analysis looks at trends in gross value added, profit margin, interest coverage, financial leverage, investment rate, and industry exit and entrance rates. The company analysis looks at annual growth ratios for operating revenue, operating expenses, EBITDA, EBIT, EPS, DPS, total assets, total equity, and net debt, based on construction companies listed on the Australian Stock Exchange. The paper's results dispel some common negative views about investment in construction; the paper's analysis shows that investing in construction companies is sound, and just as good as investing in other businesses.