Merger and acquisition activity has halted recently as many firms have been scared off by the current economic volatility, but there is a strong possibility this situation may change in the second half of 2009. Due to bonding requirements relative to the size of their backlogs, many engineering and construction firms are sitting on cash that exceeds the amount needed to execute the work. Backed by strong balance sheets, E&Cs have split into two schools of thought: ride out the storm with current cash, or use this economic trough as an opportunity to buy smaller firms to provide new growth
The market is generally healthy and steadily growing, and margins are up for large specialty contractors. Further, advances in design tools and owner demand for collaboration are giving subcontractors a seat at the table early on in projects.