Industry Trends
M&A activity in the Building Products & Services sector softened in Q4 2025, as valuation expectations between buyers and sellers and cautious buyer sentiment amid slowing construction activity contributed to a more selective deal environment.
Activity remained strong in the Building Products Distribution and Manufacturing sectors, where buyers focused on deals that strengthen distribution networks and broaden product portfolios.
Strategic acquirers remained focused on high-quality assets, emphasizing vertical integration and geographic expansion to consolidate fragmented markets and enhance operational control.
Market Dynamics
- Building Products Distribution firms like Lowe’s continue advancing digital and AI capabilities to enhance both Pro and DIY customer experiences, deploying AI-powered tools to support project planning, measurements, and omni-channel engagement.1
- Building Products Manufacturing continues to benefit from federal policy incentives and technology investments, with firms focusing on automation, reshoring, and digital tools to enhance competitiveness amid supply chain complexity and cost volatility.
- Repair & Retail spending on home improvements remains robust, supported by resilient household demand and strong homeowner equity; remodeling and repair expenditures are expected to approach record levels in early 2026 as homeowners prioritize upgrades over new purchases.2
- Residential construction activity in the U.S. continued to show a cautious and uneven performance through Q4 2025. Data from the U.S. Census Bureau’s new residential construction reports indicate that, on balance, housing starts and building permits have trended below prior year levels, reflecting ongoing headwinds in the broader housing market.3
- Commercial construction momentum eased in Q4 2025, with backlog remaining strong in infrastructure and data center projects but traditional commercial and institutional pipelines softening.
Sources: Capital IQ as of 12/31/2025, Yahoo Finance1, BUILDER2, The Washington Post3
Learn More
Reach out to Dinan Capital Advisors Managing Director Will Downing for more report insights.