Manufacturing Industry

Q3 2022: Mergers and Acquisitions Trend Report

Industry Overview

• The Manufacturing Industry comprises of operators engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.
• The industry contributes more than $2.7 trillion or 11% to the U.S. GDP and more than 12.89 million jobs. The industry’s Producer Price Index is one of the most important trackers of the economy’s direction and market sentiment.

Key Industry Trends

• Increasing supply chain shocks and continuous global uncertainties is pushing American firms to return manufacturing onshore. This trend is expected to drive significant onshoring of manufacturing activities
• Cyber infrastructure, communication technologies, and computer systems continue to be on top of the list for the U.S. national security. This as a result will move the industry to resort to domestic production.
• Emerging industries like solar and renewable product and ESG manufacturing will continue to grow as countries place emphasis on climate change.
• Nanocomputing and nanocomputing will continue to push the industry’s boundaries as technology make manufacturing safer, faster, and cost-effective. As a result, industry profitability is expected to increase.

Recent M&A Transactions

Historical Performance

• The industry has demonstrated continued resilience in 2022 as the world emerges from the COVID-19 pandemic. The CHIPS Act and Inflation Reduction Act provide a strong boost to the industry as fear of recension hover over the economy.
• The industry still continues to battle bottlenecks, logistics challenges, backlogs, cost pressures, and other global challenges that have negatively impacted the industry’s profitability since 2020.
• Over the past five years, Manufacturing Industry revenue has increased at an annualized rate of 0.4% to $7 trillion.

Future Industry Growth

• Despite the industry’s projected negative, technological development and innovations in robotics and automation, data analytics, IoT, quantum technology, and artificial intelligence will be major themes between 2023 and 2027.
• This industry expects to register increasing costs in acquiring and retaining talent, adopting technologies, and building circular and resilient supply chain.