In the 1989 movie Field of Dreams, the main character Ray Kinsella says: “I think it means that if I build a baseball field out there, that “Shoeless” Joe Jackson will get to come back and play ball again.”
And with consumer confidence, interest rates, unemployment, gas prices, and GDP growth lining up nicely, we are seeing signs across multiple sectors of the construction industry that “if you build it, they will come:”
- Office and Commercial construction spending increased 14.7% and 8.4%, respectively, in November 2014 compared to November 2013
- The U.S. hotel construction pipeline for November 2014 is up 17.3% compared to 2013; there was also a 28% increase in rooms under construction for the same period
- Residential construction spending increased 6.2% for the 11 months ending November 2014, compared to the same period in 2013
- CMF’s lower middle-market deal origination team has seen construction related deals increase from 5% to 21% of incoming deal flow in December 2014 compared to 2013.
As we predicted back in August 2014, construction is back! Private equity portfolio companies with direct and indirect ties to construction should see double digit increases in sales in 2015.
Swing for the fences before the game is over!
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