Short-Term Future Not So Bright for Manufacturing

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Dealmakers continue to express more optimism about M&A a year from now than a few months from now, and the manufacturing sector is no exception, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). The 3-month manufacturing score is 59.7, whereas the 12-month score is 61.4. (See related chart).

The numbers for the sector have been declining since early 2014, when survey respondents gave manufacturing a 3-month score of 80.6 and a 12-month score of 81.8. Among the factors mentioned by survey participants are: volatile energy prices; the tightening of credit (the subject of Mergers & Acquisitions’ May cover story); and the uncertainty of the U.S. presidential elections.

Amid the vitriolic presidential primary season, respondents’ assessment of the regulatory impact on M&A is much higher in the near term, as reflected in the three-month score of 84.7 for the manufacturing sector, compared with 71.7 in the 12-month view.

The MMP is a forward-looking sentiment indicator, derived from monthly surveys of approximately 250 executives. Other sectors covered by the MMP include: Consumer goods and retailenergytechnology, media & telecommunications (TMT)financial services, insurance and real estate (FIRE); and health care.

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