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M&A Quarterly News | Engineering and Construction Sector

By Peter Heydenrych | Nov 10, 2017

The report below gives a good overview of the fourth quarter M&A activity in the Engineering and Construction Industry Sector. M&A activity for North American based target companies in the Engineering and Construction sector for Q3 2017 included 52 closed deals, according to data published by industry data tracker FactSet.

The nonresidential building market is expected to be among the weakest-performing segments of the overall US construction market over the next few years, according to a July 2017 forecast by ConstructConnect and Oxford Economics. US nonresidential building construction activity fell nearly 18% in the second quarter of 2017 compared to the same period a year earlier.

Second-quarter activity was particularly weak for retail and parking garage segments. Between 2017 and 2021, nonresidential building construction starts are forecast to see annual growth of less than 2%. While starts were weak in the second quarter 2017, construction projects in the manufacturing sector could be a bright spot moving forward amid low energy costs, technical expertise in competitive world markets, and pressure from the Trump administration to keep manufacturing jobs in the US. Manufacturing-related construction starts are expected to drop more than 11% in 2017, then rise more than 9% in 2018. After a slight rise in 2018, commercial starts are forecast to gradually decline through 2021, but institutional projects should see modest annual upticks in activity.

Industry Indicators

  • US personal income, which drives consumer spending on home construction, rose 2.8% in August 2017 compared to the same month in 2016.
  • The value of US residential construction spending, an indicator of the health of the residential construction market, rose 12.3% year-to-date in August 2017 compared to the same period in 2016.

Posted by Peter Heydenrych.

Read the Entire Engineering & Construction 4th Quarter Newsletter Here


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