In 2018, 534 mergers and acquisitions were announced in the engineering and construction industry, a 26.5% increase over 2017, and by far the highest level of activity recorded by FMI. This year, M&A activity should remain strong but return to more normal levels (i.e., 390-440 deals).

In FMI’s 2019 survey, nearly 60% of all respondents indicated that acquisitions were a part of their current strategy, down from 70% in last year’s report. And while more than half of respondents indicated they are less likely to make an acquisition this year compared to 2018, nearly two-thirds said M&A activity will increase in 2019 and 33% believe it will stay the same.

Additionally, three-quarters of respondents believe industry valuations have risen during the past two years. The sectors most ripe for transactions include industrial and civil infrastructure. From a geographical perspective, U.S. regions where firms are most interested in expanding are the West, Southwest and Southeast.