In this issue, Ed Davis, CPA and CVA, and Partner at CI Harvest presents his research findings on the state of M&A in the Construction Industry.  These findings are ringing true with our clients in our local market.  As one current client said, "I am pleased with activity I just have not quite gotten enough juice to close the deal."

I think that about sums things up.   As always, some current listings and other activities are posted in the left column.

Enjoy your read. 

This is the 1^st in a series of short articles and updates about the construction and housing markets that we will be writing.    

We have two goals:

1. Provide a summary of industry happenings; and 

2. Describe the impact these changes have had/are having on business owners who are selling or "exiting" their business.

We would love to hear your thoughts, comments, or questions. We want this to be both light and informative. We appreciate your feedback. Thank you.  

Let's get started.  Our top 10 comments and observations are as follows: 

1. The housing market is (still) "stuck" new starts for 2011 are 44% below the 2000 levels;
2. 1^st Qtr 2011 sales are flat and housing inventory, expressed in number of months on hand, has increased;
3. Regional/small builders face fierce competition from national builders;
4. Homeowners have less cash to spend on home improvements and expect contractors to "do the same work for less money;"
5. Contractors saw signs of recovery during the 1^st Qtr of 2011, but are concerned with some leading indicators showing the momentum could fade by the 4^th Qtr;
6. Some optimism that new regulations for "green" applications could drive a large part of the recovery;
7. Acquisition Advisors Outlook reported that business owners selling their businesses during 2008-2010 got caught in a "sluggish" market (some of the owners we talked to described it differently...).  Deal activity in 2009 was less then 2008's results with some uptick in activity noted during the 4^th Qtr of 2009; 
8. For the 6 months 11/10 - 4/11, stats published by MergerNetwork indicate that, based on the number of active buyers and sellers looking for deals, we could be returning to a more stable buy/sell market;
9. A survey of construction owners reported that 40% believed there would be an increase in buy/sell activity in 2010 and 2011; and  
10. Buyers with capital (i.e., "financial buyers") are aggressively hunting for acquisition opportunities.

Click to see details of the housing data we have reviewed to form our thoughts above.  Additionally we have reviewed data from the American Institute of Architects and from the Associated Builders and Contractors.  Sign up for our RSS feed in order to get this information sent to you as we post it over the next month or two.