Home-Builder Sentiment Climbs
Homebuilder sentiment climbed 21 points in June to 58, the most substantial monthly increase ever in the National Association of Home Builders/Wells Fargo Housing Market Index. Any reading above 50 is indicative of improving confidence. The current rating is a positive trend but still down from the pre-pandemic level of 72. Current sales conditions climbed 21 points, sales expectations in the next six months rose 22 points, and buyer traffic more than doubled from May to June. Certain factors like population growth, household formation, low-interest rates, and inventory levels point to a strong market in the coming years.1 2
US Construction Seeks Infrastructure Investment
Three-quarters of U.S. equipment manufacturers say that the impact of COVID-19 on the overall economy is still an issue. With nearly half of all construction workers furloughed, many have called on the government to invest in infrastructure.3
Budget Cuts Impact on Infrastructure
Municipalities across the U.S. have implemented budget cuts and adjustments due to the effects of the coronavirus. According to a study from the (NLC), experts predict that cities will lose a total of $360 billion in revenue over the next three years. Additionally, 65% of cities will be forced to delay or cancel capital expenses and infrastructure projects.4
COVID-19 Prompts Digital Transformation in Construction
A growing number of U.S. states are allowing construction companies to resume projects as part of reopening plans, with mandatory safety standards. The new rules have prompted construction tech startups to highlight existing capabilities, such as 3D scanning and remote inspection tools, to an industry that has largely been slow to adopt digital innovations.5
3D Printing Building Construction on the Decline
The global 3D printing building construction market is expected to decline from 2019 rates to a compound annual growth rate (CAGR) of -35.76% in 2020. The decline is mainly due to the pandemic causing restrictive containment measures, including social distancing, remote working, and the closure of industries and other commercial activities.6
Installed Building Products Acquires Nationwide Gutter, LLC
Installed Building Products, Inc, an industry-leading installer of insulation and complementary building products, announced they are acquiring Nationwide Gutter, LLC. The acquisition extends its footprint throughout Texas and the surrounding states.7
Banks and investors, along with commodity traders, are stockpiling aluminum. With metal readily available, the price of buying aluminum has fallen below the cost of paying for the material now and taking delivery later.8
Largest Transactions Closed
- SitelogIQ, Inc.
- AEA Investors LP
- Western Aggregates LLC/Mathews Readymix, LLC
- Teichert, Inc./Hammonton Farms, LLC
- Reach Construction Group, LLC
- Orbital Energy Group, Inc.
- Substantially All Assets of Phase 1 & Phase II Operation in Dublin, GA
- Saint-Gobain ADFORS America, Inc.
- Continential Materials Corporation
- Bee Street Holdings, LLC
Source S&P Capital IQ as of 7/15/2020 and PCE Proprietary Data
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes