Dealmakers are more optimistic about the next three months than they are about the next 12, reflecting a growing sense that today's fair winds may soon shift.

Current conditions remain favorable. Transaction pros polled in April reported an increase in deal flow for the third consecutive month, according to the Mid-Market M&A Conditions Index (MACI), a barometer created by Mergers & Acquisitions and sponsored by PwC.

But clouds are already appearing on the horizon. For several months, the 12-month outlook for overall M&A has been lower than the 3-month outlook, according to Mergers & Acquisitions' Mid-Market Pulse (MMP), a forward-looking sentiment indicator, published in partnership with McGladrey LLP.

In a sign that the middle market may already be slowing down, 181 transactions closed in April, down from 211 completed deals in the same month the previous year, according to preliminary data from Thomson Reuters.

On the macroeconomic front, the first quarter brought some sobering data. The U.S. gross domestic product increased at an annual rate of just 0.2 percent in the first quarter, significantly lower than the 2.2 percent increase seen in the fourth quarter, according to the U.S. Department of Commerce's Bureau of Economic Analysis. (See related graphic.)

Some sectors are starting to show signs of weakness, such as manufacturing. In March and April, the Institute for Supply Management Manufacturing Index dropped to its lowest levels since May 2013. Manufacturers have been hurt by a stronger U.S. dollar that is limiting exports and fewer sales to U.S. energy companies struggling with low oil prices.

"It's a great market, but conditions like this don't last forever," says Harris Williams & Co.'s Michael Hogan in the June cover story. The message to dealmakers is clear: Close deals while you can.

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