Industrials M&A update: Q3 2017

The industrials sector is experiencing disruption in the form of labor shortages, technology-driven materials, and lower manufacturing productivity caused by recent natural disasters. At the same time, manufacturing automation continues to rise, bringing opportunity for competitive advantage along with it. This 'Industrials M&A update: Q3 2017' provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the industrial products industry.

Industrials trends

  • E-Commerce and transportation1: As retail conducted online continues to rise, freight tonnage moved by trucks is forecasted to grow 27 percent between 2016-2027. With a severe transportation labor shortage, industry operators’ margins are being squeezed. To adapt, operators are investing in supply chain technologies that drive “last mile” efficiencies, as well as innovative delivery concepts, such as smart lockers.
  • Natural disasters and productivity2: While the magnitude of the destruction remains unknown, in the wake of recent natural disasters, manufacturing productivity will likely be negatively affected in the short term from the disruption of supply chains and the destruction of production infrastructure. However, rebuilding efforts focused on residential real estate is expected to give a boost to manufacturing sector growth in early 2018.
  • Disruption in materials3: Technological advances are disrupting the materials sector. Big data is allowing supply and demand trends to be more accurately forecasted. Technological changes in downstream industries require the creation of new synthetic materials. Innovation focused on sustainability is also giving operators the opportunity to differentiate their businesses and gain market share.
  • Manufacturing automation4: Automation in manufacturing continues to rise and is expected to drive global revenues for suppliers of automation technology to $316.4 billion by 2022; seven percent growth per annum. Investments in smart manufacturing infrastructure, enabled by the cloud and internet of things (IoT), allows for effortless monitoring, waste reduction, increased production, and competitive advantages for early implementers.

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1 “The Future of Freight: How New Technology and New Thinking Can Transform How Goods are Moved,” Deloitte Consulting, 2017.
2 “Economic Impact Of Harvey Could Be Felt Nationwide Before it’s Over,” NPR. August 28, 2017.
3 “Industry 4.0 the Chemicals Industry,” Deloitte Consulting. June 7, 2017.
4 “Global Factory Automation and Industrial Controls,” ModorIntelligence. February, 2017.

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