Reflecting a wide range of concerns, including an economic slowdown and an interest rate hike, dealmakers polled in November predicted much slower growth for transactions in the financial services, insurance and real estate (FIRE) sector than they did the previous year, according to Mergers & Acquisitions Mid-Market Pulse (MMP). (See related graphic.)
The FIRE Sector's score of 51.4 for the 3-month outlook fell far below the 79.3 score the sector garnered in November 2014, when optimism was high following the mid-term elections. The sector's 12-month scores followed a similar decline, with the current 57.8 much lower than the previous year's 87.2.
Among the concerns identified were: rising interest rates; economic slowdown in the U.S. and also in China and elsewhere; the threat of terrorism incidents throughout the world; and uncertainty about the outcome of the 2016 presidential election. For more on the election, see With 2016 Election Looming, Politicians will Target Carried Interest.
The MMP is a forward-looking sentiment indicator, derived from monthly surveys of approximately 250 executives and published in partnership with RSM LLP (formerly McGladrey). Previous sector forecasts include technology, media and telecommunications, health care, energy, manufacturing and consumer goods & retail.