New York — Merger and acquisition (M&A) activity in the engineering and construction sector remained consistent for full year 2015, according to Engineering growth, a quarterly analysis of the global deal activity in the engineering and construction industry by PwC US.

On an annual basis, deal volume remained flat, with 227 deals occurring in both 2014 and 2015. However, deal value declined 32 percent from $164.3 billion in 2014 to $111.8 billion in 2015. Average deal size for 2015 also declined to $492.8 million, compared to $724 million in 2014. For the fourth quarter of 2015, deal volume decreased by 28 percent to 51 deals, compared to 71 deals in the fourth quarter of 2014. Deal value for the quarter saw a significant decline, decreasing 52 percent to $27.5 billion in the final quarter of the year, compared to $56.8 billion on a year-over-year basis.

“The decline in deal value for 2015 was driven by the rise of smaller announced deals, as acquirers worked to strategically purchase smaller rivals and gain entry into new markets,” said H. Kent Goetjen, U.S. engineering and construction leader at PwC. “Despite the decline in value, the consistent number of deals for the year is a testament to the overall health of the engineering and construction industry. With upbeat housing fundamentals, low interest rates, infrastructure needs, changing population demographics and robust job growth, the industry is well positioned to continue on this trajectory for 2016.”

On an annualized basis, the construction materials manufacturing companies had the most in dollars and deals, with $36.4 billion (compared to $42.3 billion in 2014) and 71 deals (which was flat compared to 2014). Contrary to recent quarters, pure construction companies had both the highest deal value and volume for the fourth quarter, with $14.9 billion going into 17 companies, increasing from $3.2 billion in 12 deals in the last quarter of 2014.

For 2015, Asia and Oceania targets captured the most deal value and volume, with 140 deals with a total value of $55.7 billion. This represents a 72 percent increase in deal value and an 18 percent increase in deal volume. While North America saw a decline in deal value from $55.2 billion in 2014 to $29.9 billion in 2015, the region had the highest average deal value at $828.6 million, compared to $397.8 Asia and Oceania.

Financial investors are continuing to find the construction industry attractive, participating in 93 deals totaling $27.8 billion for 2015. “Due to the expected economic recovery, particularly in Europe and Latin America, construction companies are continuing to seek financial investors to strengthen their financial position as they look to compete on a global scale,” said Goetjen.

“Looking to 2016, deal activity should continue to be robust, with the number of transactions projected to remain strong as engineering and construction companies are seeking not only to divest non-strategic assets, but also concurrently look to enhance and compliment their core business,” said Goetjen. “In addition, the continued need to repair, replenish, replace and develop infrastructure, in both the public and private sectors, will influence transaction activity for the industry.”

PwC’s engineering & construction M&A analysis is a quarterly report of announced global transactions with value greater than $50 million analyzed by PwC using transaction data from Thomson Reuters.