The report below gives a good overview of the Spring 2023 M&A activity in the Industrials Industry Sector. In 2022, industries worldwide displayed consistent strength, building on the momentum gained after the pandemic. The industrial sector experienced stable growth rates of around 3.0% - 4.0% throughout the year, up until Q4 of 2022, when the growth rate significantly dropped to 1.5%, according to a report published by the United Nations Industrial Development Organization (UNIDO). The decline in growth during Q4 of 2022 was due to high energy prices, inflationary pressure, rising interest rates, and persistent disruptions in the supply chain of raw materials and intermediate products. Industrial activity showed signs of recovery during Q1 of 2023, especially due to a revival in economic sentiment and lower energy prices. Oil prices dropped by almost 38.0% between June 2022 and March 2023, as per Organization for Economic Co-operation and Development's (OECD's) Economic Outlook Report. The unexpected early reopening of the Chinese economy played a significant role in the recovery of industrial activity. Despite early signs of recovery, the path to full recovery for the US industrial sector remains challenging and protracted, especially for sectors with complex multinational supply chains. The early recovery has been led by a handful of subsectors, such as electrical equipment and components, while many key sectors have continued to face headwinds. The segments that have lagged are expected to take another couple of quarters or so to return to growth, implying that a broad-based growth of the industrial sector might only be witnessed in late 2023.
Posted by Patrick Powell.