www.harriswilliams.com Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. BUILDING PRODUCTS & MATERIALS INDUSTRY UPDATE │ DECEMBER 2016
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Building Products & Materials Industry Update - December 2016
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www.harriswilliams.com
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised andregulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
BUILDING PRODUCTS & MATERIALSINDUSTRY UPDATE │ DECEMBER 2016
Harris Williams & Co. is pleased to present our Building Products and MaterialsIndustry Update for December 2016. This report provides commentary andanalysis on current capital market trends and merger and acquisition dynamicswithin the global building products and materials industry.
We hope you find this edition helpful and encourage you to contact us directly ifyou would like to discuss our perspective on current industry trends and M&Aopportunities or our relevant industry experience.
BUILDING PRODUCTS & MATERIALS
INDUSTRY UPDATE │ DECEMBER 2016
OUR PRACTICE
Harris Williams & Co. is a leading advisor to the building products and materialsindustry. Our significant experience covers a broad range of end markets,industries, and business models.
MODEST GROWTH FOR NONRESIDENTIAL CONSTRUCTION IN 2017
U.S. LUXURY HOME SALES CONTINUE TO POST GAINS
FMI NONRESIDENTIAL CONSTRUCTION INDEX (NRCI) DOWN IN THE FOURTH QUARTER 2016
RESIDENTIAL CONSTRUCTION EMPLOYMENT CONTINUES TO CLIMB
FMI 12/9/2016
The FMI Nonresidential Construction Index slipped just 0.4 points in the fourth quarter to 56.9, compared to 59.5 in thefourth quarter of 2015.
While the trend indicates a slower outlook for nonresidential construction, the index is still solidly in positive territory as ithas been since the first quarter of 2012.
Read the full article here.
BUILDING PRODUCTS & MATERIALS
INDUSTRY UPDATE │ DECEMBER 2016
OPTIMISM, CAUTION SET TO GREET REAL ESTATE IN 2017
ABC 12/1/2016
Associated Builders and Contractors (ABC) forecasts a slowdown of growth in the U.S. commercial and industrialconstruction industries in 2017, according to the association’s forecast for next year.
While contractors are vulnerable to rising commodity prices and potential interest rate increases in 2017, the middlingconsumer-led recover should still lead to modest growth in construction spending and employment.
Despite these headwinds, there is a collective awareness among American enterprises that they will need to replacemuch of their capital stock in future years, as the average age of all fixed assets, including structures such as factoriesand hospitals, stands at 23 years – the oldest on record tracing back to 1925.
Read the full article here.
Construction Dive 12/9/2016
Homebuilders and remodelers have added 120,000 jobs on a net basis in the last 12 months and have added 658,000positions since the Great Recession, according to an analysis of Bureau of Labor Statistics data from the NationalAssociation of Home Builders.
The NAHB said recent payroll gains build on a pickup this fall after softening earlier this year. The six-month movingaverage of new residential construction jobs has risen to 10,400 per month.
Read the full article here.
Forbes 12/13/2016
Depending on where you live, U.S. real estate markets endured an uneven year in 2016. While prices are set to seemodest gains again this year, some important real estate markets showed signs of slowing.
Mortgage rates have jumped by roughly half-a-percentage point since late October, reflecting expectations thatPresident-elect Trump’s pro-growth policies will drive up interest rates.
According to Jonathan Smoke, Chief Economist for Realtor.com, “The 2017 housing market will be a year of slowing,yet moderate growth, set against the backdrop of a changing composition of home buyers and a post-electioninterest rate jump that could potentially price some first-timers out of the market.”
Read the full article here.
Construction Dive 12/13/2016
Despite a growing sense that activity at the higher end of the housing market is showing signs of easing, sales ofhomes priced above $600,000 have increased in 37 of 43 counties surveyed by research firm John Burns Real EstateConsulting, according to a report in The Wall Street Journal.
For the markets surveyed, home sales in that price range rose 10% in the last 12 months but only 5% in the third quarterfrom the year-ago period, suggesting a slight slowdown throughout the year.
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence, andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website.
OUR FIRM
BUILDING PRODUCTS & MATERIALS
INDUSTRY UPDATE │ DECEMBER 2016
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HARRIS WILLIAMS & CO.
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BUILDING PRODUCTS & MATERIALS
INDUSTRY UPDATE │ DECEMBER 2016
DISCLOSURES
SOURCES
Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
THIS REPORT MAY CONTAIN REFERENCES TO REGISTERED TRADEMARKS, SERVICE MARKS AND COPYRIGHTS OWNED BY THIRD-PARTY INFORMATION PROVIDERS. NONE OF THE THIRD-PARTY INFORMATION PROVIDERS IS ENDORSING THE OFFERING OF, AND SHALL NOT IN ANY WAY BE DEEMED AN ISSUER OR UNDERWRITER OF, THE SECURITIES, FINANCIAL INSTRUMENTS OR OTHER INVESTMENTS DISCUSSED IN THIS REPORT, AND SHALL NOT HAVE ANY LIABILITY OR RESPONSIBILITY FOR ANY STATEMENTS MADE IN THE REPORT OR FOR ANY FINANCIAL STATEMENTS, FINANCIAL PROJECTIONS OR OTHER FINANCIAL INFORMATION CONTAINED OR ATTACHED AS AN EXHIBIT TO THE REPORT. FOR MORE INFORMATION ABOUT THE MATERIALS PROVIDED BY SUCH THIRD PARTIES, PLEASE CONTACT US AT THE ABOVE ADDRESSES OR NUMBERS.
The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.