Here at Constructech we have been watching the changing landscape of the industry for decades, seeing as activity in the market ebbs and flows. Where do we stand in 2025? Let’s take a closer look at the market, M&A (merger and acquisition) activity, and what the future holds for technology.
Research from McKinsey & Co., earlier this year shows the engineering and construction industry has grown steadily by about 5% per annum, which is expected to increase to 6-7% by 2030. This is due to several factors including growth in emerging markets, government infrastructure programs, demand for housing, and the need for critical infrastructure. M&A activity can also be an indicator of the overall market landscape.
Looking at M&A in engineering and construction, we see the average number of deals per year increased by roughly 60%. From 2014 to 2019, there were roughly 1,100 transactions and from 2020 to 2024, there were about 1,800 transactions.
Deloitte also did an outlook for the engineering and construction industry for 2025 and found for optimism to occur it determined M&A activity will be an important growth strategy for both large and small firms. Between August 2023 and July 2024, there were 528 completed M&A deals in the construction industry, totaling more than $38 billion, which is more than three times the deal value from the previous year.
Certainly, there is also quite a bit of movement in the technology space in particular, with M&As, company spinoffs, and other activity happening on a fairly regular basis—something we cover here at Constructech regularly. We do sometimes see peaks and valleys, but there is almost always movement of some sort to watch.
As just one example, in July JDM Technology Group, announced it has acquired Infotech AS, which specializes in construction site software for the Nordic construction industry. This certainly isn’t JDM’s first foray into acquisitions. Jim McFarlane and his team employ a strategy to buy and build to create a strong marketshare. Some of its companies include Explorer Software, Computer Guidance Corp., Integrity Software, ConEst Software Systems, JOBPOWER, and Maestro Technologies, just to name a few. JDM Technology Group has dozens of acquisitions under its belt.
As another example, in June, Command Alkon announced the acquisition of Digital Fleet, which is a provider of fleet management solutions. This brings greater fleet capabilities to Command Alkon’s ecosystem, which includes Dispatch, Material Supply, Batch AI, Sales & Quoting, Payments, and more. The hope here is that bringing the technologies together will lead to deeper insights.
While M&A is one way change is transpiring in the industry, another is company spinoffs. In June, Hexagon announced the spin-off of its asset lifecycle intelligence and safety, infrastructure & geospatial divisions. It will now operate as Octave, which will be a pureplay software and SaaS (software-as-a-service) company. Here in the month of September, Octave has unveiled its new leadership team.
The bottomline is change is inevitable. Companies will be acquired. New companies will spin off. New technology will emerge. The question remains: How will construction companies adapt to the changes that are happening? How will the industry change and evolve in the years ahead? That is the trillion-dollar question.
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