Our Contract Manufacturing Industry Report provides an overview of key trends and developments affecting the industry. This quarterly update covers market performance, economic indicators, and emerging opportunities.
Below are the highlights from the full report. Click the link to download the complete analysis.
Market Dynamics & Outlook
Economic activity in the manufacturing sector has indicated mostly positive trends for Q3 2024 as all sub sectors saw an increase in QoQ EV/EBITDA multiples except for the energy sector.
The Industry experienced weak demand especially in the end markets of agriculture, construction, truck and industrial applications which have resulted in a negative impact to sales for manufacturing firms within this industry.
However, industry tailwinds were primarily driven by the packaging and aerospace & defense niches, which experienced the most significant quarterover-quarter increases in equity value and EV/EBITDA multiples.
Moreover, within the US specifically, a manufacturing reshoring renaissance is underway as Geopolitical risks, such as trade tensions, global energy concerns, and political unrest, coupled with rising labor and shipping costs, have significantly altered the dynamics of global supply chains, subsequently incentivizing domestic manufacturing efforts.
New legislation has also contributed to the resurgence of onshoring, including the 2021 Bipartisan Infrastructure Law, the 2022 Chips and Science Act, and the 2022 Inflation Reduction Act. Each of these laws includes provisions related to the production and procurement of U.S.-made products and components, providing advantages to companies that prioritize domestic manufacturing.
