Building Products

Key Trends in the Market

The large, vibrant and mostly fragmented nature of the North American building products markets make them fertile ground for mergers and acquisitions.

Some of the market trends we are following:

• Housing Affordability: High demand and low supply over the past several years led to housing prices overheating in some markets. Now with mortgage rates rising, affordability is expected to dampen demand in the near future. 
   
• Labor Markets: Products and systems that reduce labor requirements within the building process are in demand as construction firms continue to experience staffing challenges. Tight labor markets make organic and greenfield growth slower and more expensive, pushing more into the M&A market to achieve growth goals. And we are seeing the increased value of acquired labor forces manifest itself in M&A pricing.
   
• Distributor Consolidation: Large, fragmented distribution markets continue to consolidate at a quick pace, principally driven by private equity activity.
   
• Direct to Consumer: As consolidation and ecommerce alter the distribution landscape, manufacturers are increasingly exploring direct-to-consumer models, channel conflict notwithstanding.
   
• Raw Materials Pricing: Rising raw material prices during the pandemic were a boon to building products market participants, as price increases were easy to push through. Now with the prices of aluminum, steel, PVC resin, forest products and other commodities that make their way into a building declining, we anticipated seeing product pricing dropping as well.
   
• Outdoor Living: Pandemic-driven interest in improving outdoor living space shows no sign of slowing. The decking and pavers, outdoor furniture, landscape and irrigation sectors all continue to see a great deal of activity.
   
• Air Quality: A renewed focus on indoor air quality is leading many to upgrade existing systems.
   
• Infrastructure: With the passage of the $1.2 trillion infrastructure bill, opportunities for suppliers across these sectors will continue to grow. We see opportunities in water related markets, as changing weather pattens lead to too much water in some places and not enough in others.

How We Help

If you are looking to harvest the value you have created in your company, expand via acquisition or source private capital, we understand the drivers that create market value and can position your company to achieve maximum success. We also have consultants who specialize in building products and can provide you with tailored solutions to your business needs.

Like you, we are dedicated to the market – studying and analyzing trends and speaking daily with market leaders, investors and key decision-makers. Our dedication provides us with insight into how value is created in the market, how to best position your company, and how to articulate its value to the right audience.

With decades of experience, you can count on FMI’s Building Products team to deliver flawless execution and superior outcomes.

Who We Serve

• Window and Door
• Cabinets and Architectural Millwork
• Kitchen, Bath and Plumbing
• Flooring and Tile
• Heating, Ventilation and Air Conditioning
• Lighting and Electrical Products
• Roofing, Siding and Insulation
• Building Envelope
• Waterworks and Infrastructure Products
• Masonry and Concrete Products
• Lumber and Forest Products
• Tools and Hardware
• Solar Energy Products
• Outdoor Living Products
• Adhesives, Sealants and Coatings