Industry Trends
M&A activity in the Building Products & Services sector saw modest gains from Q2 2025, supported by improving construction confidence despite tariff-related materials increases.
Activity was particularly strong in the Building Products Distribution and Manufacturing sectors, where companies pursued investments to address supply chain inefficiencies and capitalize on the growing demand for sustainable building products.
Strategic acquirers continue to emphasize vertical integration and geographic expansion, reflecting strategic efforts to consolidate fragmented markets and gain greater control over production and distribution.
Market Dynamics
- Building Products Distribution firms are investing in digital and e-commerce platforms as builders and contractors increasingly adopt online procurement, which is expected to become the industry norm.
- Building Products Manufacturing is benefiting from federal initiatives supporting domestic production and sustainable building practices, helping firms address supply chain inefficiencies and meet growing demand.
- Repair & Retail spending on home improvements remains robust, with remodeling projected to reach $524 billion by Q1 20261, supported by high home values and continued homeowner investment in existing properties.
- Residential Construction showed signs of slowing in Q3 2025. Single-family starts fell 7% to 890,000 units amid elevated mortgage rates, while multi-family starts declined 11% to 403,000 units, reflecting softer demand despite continued rental market support. Total building permits dropped 6% month-over-month to 1.3 million, indicating a broader slowdown in construction activity.
- Momentum in Commercial Construction eased in Q3 2025, despite continued infrastructure investment. While confidence in sales and staffing remains relatively high, project cancellations and delays driven by rising material costs have moderated growth.
Sources: Capital IQ as of 09/26/2025; 1 Joint Center for Housing Studies of Harvard; 2 FRED; 3 Lesprom
Learn More
Reach out to Dinan Capital Advisors Managing Director Will Downing for more report insights.
