The construction industry in North America has been driven by various factors, including population growth, urbanization, infrastructure investment, and technological advances. The industry is also influenced by government policies and regulations related to building codes, zoning laws, and environmental standards.
Whitepaper | Private equity investing in the North American construction industry
The construction industry in North America has been an attractive target for private equity investments due to its potential for strong returns and the opportunity to invest in a range of sub-sectors, including building materials, products and engineering. This report analyzes private equity deals in the construction industry in North America between 2010 and 2023 and provides insights into industry trends and performance.
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Contextualizing the economic, country, and industrial environment
The period covered by the data includes the recovery from the 2008 Global Financial Crisis (GFC), which had a significant impact on the construction industry. The GFC resulted in a sharp decline in construction activity and a contraction in the industry. The recovery in the industry was gradual, with North America seeing a slow but steady increase in construction spending. According to the U.S. Census Bureau, construction spending in the U.S. increased from $854.4 billion in 2010 to more than $1.51 trillion in 2021.
Private equity deals in the construction industry in North America (2010-2023)
Private equity deals in the construction industry in North America have generated attractive returns for investors over the last 12 years, with a median internal rate of return (IRR) of 20.12%. Deals involving construction materials have performed particularly well, with a median IRR of 31.88%, and a quarter of deals yielding IRRs higher than 58%.