As long as money remains cheap and the economy continues to improve then builders will keep building said Chris Daum, president of investment banking at FMI. "We are in the fourth year of a continuous recovery," said Daum. "Total infrastructure construction is about 5% of GDP. Historically it is about 8% of GDP. The reality is that as long as the economy continues to grow and recover there is plenty of upside for infrastructure building across the entire industry."
Daum’s firm FMI provides management consulting and investment banking services to the engineering and construction industry.
He adds that low interest rates are also keeping the mergers and acquisitions market hopping.
"The reality is that the buyers are the big global, 200 to 250 contractors and they are doing at least one acquisition a year," said Daum. "And without question they say the U.S. market is the most attractive for them and the way they get positioned into it is through acquisition."
Surprisingly, Daum said new energy construction projects continue to fill the proverbial pipeline, despite the fact that oil prices have plummeted in the past year to around $52 a barrel at last check. Most of the construction slowdown in the industry can be found upstream with the E&P players, according to Daum.
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