The global engineering and construction (E&C) sector ended the first half of 2017 with an investment interest of $34.2 billion, 23% lower than 1H 2016. The majority of deal activity occurred in the construction materials manufacturing and civil engineering categories attributed to an increase in infrastructure and utility construction projects. While deal volume has decreased compared with 1H 2016, it continues to be supported by strong activity in the Asia & Oceania region.
The E&C sector has continued to benefit from the increasing rate of urbanization and infrastructure development in emerging economies like China and India. Meanwhile, developed markets are actively seeking geographical expansion and new project development opportunities in order to reduce their risk exposure.
There is a growing presence of tech companies and startups in the E&C sector, indicating an increasing potential for disruption. The sector has seen a rising interest in applications for mobile and cloud technologies, AI and robotics, AR/VR, and CAD software to make processes more efficient and streamlined. We expect that increasing infrastructure investment in emerging economies coupled with advances in technology will continue to drive the activity for 2H 2017.
"Deal value rebounded in Q2 2017 driven primary by four $1.0 billion plus deals and 8 of the 10 largest deals in H1 2017. Overall deal activity, however, remained largely flat in Q2 versus Q1 and down from H1 2016. The market shows signs of moving beyond the uncertainty that we believe contributed to a slow start to the year, particularly in Europe."