The report below gives a good overview of the Fall 2022 M&A activity in the Industrials Industry Sector. The Industrial market is currently witnessing headwinds such as poor macroeconomic conditions, labor shortages, and supply chain constraints. The rising inflation rate and persistent supply chain issues are causing raw material sourcing challenges. The rising inflation will increase manufacturing and production costs leading to project cost overrun. Additionally, supply chain issues are causing shipping and transport delays of raw materials for companies in the industrial sector. These supply chain concerns have reduced profits by 13.0% for businesses in the Industrial sector in 2022, as per report published by Deloitte. Furthermore, the labor shortage due to the skill gap remains a major concern, as many sub-sectors of the Industrial sector are labor oriented. Hence, companies are adopting advanced technologies such as digital twin technology to counter the labor shortage. These advanced technologies are expected to make the production and manufacturing processes efficient and would require less labor. The industrial output in the US grew by 0.4% in September 2022, compared to August 2022, as per research published by Federal Reserve. Additionally, rising consumer interest in electric vehicles (EVs), growing demand for various specialty chemicals in emerging economies, and new technical innovations are expected to be the growth drivers of the industry. The increasing popularity of EVs is expected to act as a tailwind for this industry as it will require the production of new aftermarket products necessary for EVs.
Posted by Patrick Powell.