Construction Market Continues to Grow
The U.S. construction market is currently positioned as the second largest in the world behind China and is projected to finish with growth of 3.3% for 2019. For the year 2020, it is projected that the U.S. construction market will showcase growth of 1.7%. The residential construction sector continues to remain the strongest driver within the space as it represents around 40% of the total market.1
Contractors Anticipate Continued Growth Into 2020
Contractors who participated within the 2019 Q4 USG + U.S. Chamber of Commerce Commercial Construction Index (CCI), expect their revenues to either increase or remain the same within the next 12 months. Almost all contractors who participated in the study (96%) reported either high or moderate confidence in new business opportunities over the next 12 months.2
Single-Family Housing Starts Expected to Grow 10% in 2020
Fannie Mae’s Economic and Strategic Research Group predicts that there will be a 10% growth in single-family housing starts during 2020 and will top 1 million new homes in 2021. Key drivers of this forecast include the strong labor market, robust consumer spending, low mortgage rates, and the continued surge in building permits.3
Housing Permits at 12 ½ Year High
Within the third quarter of 2019, housing starts rose 3.2% to a seasonally adjusted annual rate of 1.365 million units in the month of November. Single-family homebuilding, which accounts for the largest share of the housing market, increased 2.4% to a rate of 938,000 units in November, the highest level since January 2019. Single-family housing permits also rose 0.8% to a rate of 918,000 units in November, the highest since July 2007.4
Lumber Industry Expected to Benefit from Infrastructure Projects
The lumber industry stands to benefit from increased government spending on infrastructure projects, strong gains in repair and remodeling activity and the continued surge in single-family housing starts and prices. U.S. housing prices rose 4.9% from 3Q 2018 to 3Q 2019.5 6
Cement Consumption Forecasted to Grow
U.S. cement consumption is forecasted to grow 1.7% in 2020 according to the Portland Cement Association (PCA). The PCA attributes this continued growth to the 2018 Federal Budget in which allocated $20 billion for infrastructure revamp in 2018 and 2019.7 8
Largest Transactions Closed
- APi Group, Inc.
- J2 Acquisitions Limited
- Milgard Manufacturing Incorporated
- MI Windows and Doors, LLC
- Plateau Excavation, Inc.
- Sterling Construction Company, Inc.
- Torrent Resources, Inc.
- Oldcastle Infrastructure
- Advances Window, Inc.
- Exchange Income Corporation
- DrawWorks L.P.
- McCoy Global Inc.
- Evercon Energy LLC
- Lineal Star Holdings, LLC
Source S&P Capital IQ as of 1/10/2020 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