Industry Insights: Building Products & Services - Winter 2026
The building products industry is a diverse ecosystem that encompasses the manufacturing, distribution, and sale of materials used in construction and renovation. The diverse products include a wide range of products such as:
•Structural materials: Concrete, steel, lumber, and bricks.
•Insulation: Materials that provide thermal or sound insulation.
•Roofing: Shingles, tiles, and membranes.
•Windows, Siding, and doors: Various types of doors, siding, and window frames.
•Finishes and fittings: Paints, tiles, flooring, countertops, and cabinetry, including related install services.
•Plumbing and electrical supplies: Pipes, fixtures, wiring, and related hardware.
The Mazzone & Associates building products industry report leverages our deep understanding, knowledge, and experience with various economic indicators and trends analysis to provide our current view on the U.S. market. Dom Mazzone is a former executive at The Home Depot, so he and the Mazzone & Associates team are entrenched in the building products industry, regularly working on transactions and advising owners, chief executive officers, management teams, and private equity groups interested and working in the space.
Macroeconomic Perspective
The building products industry plays a critical role in supporting the construction of residential, commercial, and industrial buildings, as well as infrastructure projects like roads and bridges. It's essential for urban development, sustainability initiatives, and the overall economy.
In 2025, U.S. housing economic indicators presented a mixed but gradually improving backdrop over the second half of the year. Declining interest rates are beginning to ease pressure on buyers who have faced affordability challenges over the past several years. Unsold home inventory remains near 16-year highs, yet gradual home price declines suggest that listings may start to move more freely without prices dropping dramatically. Interest rate cuts are promising (albeit perhaps not stalled), potentially supporting renewed homebuyer activity and encouraging development, as modest price adjustments could unlock inventory and help rebalance the market. The struggles in the sector in 2025 are likely to continue in 2026. Changing trade and immigration policies have presented challenges throughout the year, but the housing market has proven resilient to these upward price pressures. President Trump’s recent focus on funds that purchase homes hopefully will not lead to any legislation or presidential actions that further chills the marketplace.
Industry Outlook
The building products and services sector is expected to remain under pressure in early 2026, as elevated material costs and residual effects of higher interest rates continue to weigh on activity. However, the recent decline in borrowing costs should help support renewed homebuying and residential construction activity, easing affordability pressures for buyers. In the non-residential segment, growth in data center development and sustained public infrastructure investment are likely to underpin demand, providing stability amid broader market headwinds. Together, these factors suggest that while challenges persist, the sector may begin to see gradual recovery and more balanced activity as the year progresses, supporting opportunities across both residential and commercial construction markets. In particular, the current macroeconomic environment where luxury, high-end products remain strong seems to apply in both residential and commercial buildings.
Public Company Information & Analysis
Public building products and services equities returns underperformed returns in the broader equity markets in 2025, reversing a multi-year trend of relative outperformance. The S&P 500 generated strong gains driven largely by an AI-led expansion concentrated in mega-cap technology and growth-oriented sectors. Conversely, building products and services stocks, like many other sectors, have lagged amid subdued housing demand and slower construction activity.
M&A Trends
Merger and acquisition volume in the building products and services space fell slightly in 2025 due in large part to a mid-year slowdown induced by trade policy changes and economic uncertainty. Throughout the second half of 2025, the building products and services M&A market showed significant signs of improvement as volume picked up and several meaningful transactions closed. M&A activity for the broader market remained relatively stable in terms of both volume and valuation. At Mazzone & Associates, we successfully closed nine transactions during the year, including two within the building products and services space, reflecting continued buyer appetite for high-quality assets. As for 2026, we already have two building products companies for sale under letter of intent and have been engaged by two others, including a building services business with over $20 million in TTM EBITDA, to begin a sale process. We are in discussions with several others for buy-side, financing, and sell-side assignments.