M&A Market Update – Prepare for 2016
On September 8 the Dayton Region Manufacturers Association (DRMA) hosted a presentation by Brian Beaulieu of ITR Economics entitled Rising Trends for the U.S. and Global Economy. The information presented is important for all business owners, especially those considering a transfer of ownership over the next 5 years.
Here’s the good news. ITR forecasts U.S. GDP to continue its upward trend through mid-2018, with industrial production on the rise for a better 2017. Manufacturing, construction and most other industry categories will continue to grow at a slow, but steady rate into 2018. The upward trend will be longer and stronger for aerospace products and parts.
With area manufacturers making up the audience, an important component of the message was the forecast of “bright days ahead” for manufacturing in 2017.
The bad news is Beaulieu’s belief that we’ll see a downturn in 2019. While he doesn’t believe it will be anything like the Great Recession it is still cause for concern and proper planning.
For those looking to sell their business over the next 5 years this presents a problem with timing. If revenues and earnings dip it will reduce the value of the business. Depending on how the business bounces back, it may take some time for the value to recover.
The questions for an owner are: do I have the energy and capital to fight through another downturn; do I have the time to wait for the value of the business to recover to an acceptable level.
Don’t get me wrong, the “sky is not falling.” Far from it, Beaulieu’s message was very positive. ITR’s research indicates, with the exception of the downturn in 2019, that the U.S. economy should grow over the next 13-15 years.
To learn more about ITR Economics go to www.itreconomics.com.
For any business owner who sees the projected 2019 downturn as problematic for the planned sale of their business we suggest a no-cost, no-obligation meeting to discuss your options. Please contact us at dayton@sunbeltnetwork.com or cincinnati@sunbeltnetwork.com or call 937-866-4611.
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