M&A Update | Engineering & Construction H2-2017
Engineering and construction industry overview and indicators Baker Tilly Capital, LLC’s engineering and construction M&A update provides an overview of the U.S. engineering and construction sector, including recent performance and M&A trends. In the second half of 2017 (H2-2017), construction spending totaled $648.8 billion, which represented a 12 percent increase from the first half of 2017 (H1-2017) and a 2 percent increase from the same period in 2016. Growth in total construction spending has decelerated since 2015, but remains positive. With the passage of the Tax Cuts and Jobs Act, private capital expenditures could continue to accelerate.
Total construction spending in the U.S. (in millions)
$400,000
$350,000
$337,947
$310,886
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Q1-2012
Q2-2012
Q3-2012
Q4-2012
Q1-2013
Q2-2013
Q3-2013
Q4-2013
Q1-2014
Q2-2014
Q3-2014
Q4-2014
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
Source: U.S. Census Bureau
Growth in public spending remains muted and though current administration plans are conservative they do include increases to infrastructure and defense spending. Since the Great Recession (2007-2009), public spending has declined towards a long run average and private spending has increased substantially. In December of 2017, private construction spending surpassed the 15-year high established pre-recession in February 2006.
Public versus private construction spending in the U.S.
$1,200,000
Private Public
$963,247
$1,000,000
$800,000
$600,000
$400,000
$290,047
$200,000
$0
Jan-2003
Jan-2004
Jan-2005
Jan-2006
Jan-2007
Jan-2008
Jan-2009
Jan-2010
Jan-2011
Jan-2012
Jan-2013
Jan-2014
Jan-2015
Jan-2016
Jan-2017
Source: U.S. Census Bureau
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