Private Equity Sector Brief: Industrial Services
The U.S. industrial services market expanded by 92% between 2020 and 2024, driven by post-pandemic construction rebounds, federal infrastructure investment, and surging demand for power generation capacity. This sector brief outlines the market opportunity, thematic drivers, and competitive fragmentation that make industrial services an increasingly attractive target for private equity investment.
Industrial services across four end segments—data centers, oil and gas, power generation, and manufacturing—present a compelling investment opportunity anchored by their mission-critical nature, recurring revenue streams, and a highly fragmented competitive landscape. Owners recognize that facility downtime is far costlier than investing in proper maintenance, making these services essential and non-deferrable even during economic downturns. This fragmentation supports scalable, acquisition-led growth, with significant opportunities for value creation and operational efficiency.
Market Size and Growth Outlook
Industrial services represents a stable and growing sector of the construction industry. The total U.S. market is estimated at $223 billion in 2025, and is projected to exceed $265 billion by 2029 at a 4.4% compound annual growth rate (CAGR). In 2025, maintenance, repair and overhaul (MRO) services are expected to represent $56.5 billion in annual spending, while new construction, renovation and retrofits account for $166.9 billion.
MRO services are forecast to grow at a 6.6% CAGR from 2025 to 2029, outpacing the 3.7% CAGR projected for new construction. This faster growth reflects MRO's resilience in economic downturns, largely due to the essential, non-deferrable nature of these activities.
Why This Sector Attracts Private Equity
In this brief we explore what makes this sector attractive to private equity investors, including:
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Aging industrial install base requiring ongoing maintenance, inspection, and system upgrades across electrical, mechanical, boiler/chiller, sheet metal, conveyor, and millwright/rigging services
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Local and regional companies ripe for consolidation, creating opportunities for bolt-on acquisitions
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Ability to create multi-trade platforms that bundle services and capture broader client demand
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Key growth drivers including increased reshoring efforts, data center expansion, energy efficiency mandates, decarbonization requirements, and more technically sophisticated facility buildouts
This brief is intended to serve as a roadmap for private equity firms developing an investment thesis or targeting an acquisition in the industrial services space.
