【正文】 ion partners to seek strategies in order to improve performance. Current research introduces a performance evaluation model for construction panies in order to provide a proper tool for a pany’s managers, owners, shareholders, and funding agencies to evaluate the performance of construction panies. The model developed helps a pany’s management to make the right decisions. Financial, economical, and industrial data are collected from Egyptian construction panies for nine consecutive year s _1992–2000_. Five indices _models_ are developed: pany performance score, economy performance score, industry performance score, performance index, and performance grade. The models developed consider panies in four construction sectors: general building, heavy, special trade, and real estate. These models acmodate the effect of macroeconomic and industry related factors and pany size on the performance evaluation. The final oute of current research is a performance grade, which provides the performance of a construction pany. The developed model is validated, which shows robust results.CE Database subject headings: Construction industry。 Performance characteristics。 Construction firms。 Case ReportsIntroductionPerformance evaluation of construction panies gains its importance from the fact that today’s world is moving rapidly toward globalization, which means the international General Agreement on Tariffs and Trade _GATT_. The concept of GATT is to conduct business anywhere, any time, and anyhow. In this environment, many multinational panies are awarded business in other countries in which they are peting with local panies. Both multinational and local construction panies should seriously look forward to improving their performance in order to maintain their international reputation. The current study develops performance evaluation of construction panies that shows the position of such a pany among others. This evaluation is deemed essential for owners, shareholders, and funding agencies of a pany because it clearly draws the correct position of the pany. If the pany position is good, this will increase the agencies’ interest in the pany and vice versa. Many models were developed to evaluate panies’ performance, but few of them consider economical and industrial changes in their models. Therefore, the major objective of the current study is to design a performance index that evaluates a pany’s financial situation within the construction industry. This model will consider the economical and industrial changes and their effect on the pany.The current study presents a performance evaluation model based on financial ratios as well as economic and industry factors. The model developed considers four construction categories _based on the Egyptian contractor union: (1) general building。 (3) special trade。 (2) pany。 (2) financial statement structural analysis。 Severson et al. 1994). Financial statement structural analysis determines the proportion that each pany’s group or subgroup represents in the financial statement (Hasabo 1996). A deposition ratio is used to determine changes in the percentage of the pany’s asset ponents in two consecutive years (Hasabo 1996). The first statistical evaluation models to predict financial failure were developed by Beaver _1966_ but they were not targeting the construction industry. Companies were divided into two main groups: failed and non failed panies with similar asset size. Statistical models that are based on financial ratios of failed and non failed panies represent financial statement ratio analysis. Beaver _1966_ pared these two groups based upon 30 financial ratios in which there were differences in the m