Contract Manufacturing Industry Report - Q4 2024

Report Highlights

Elements Affecting Contract Manufacturing Dynamics and Outlook in Q4 2024 and Beyond

• Economic activity in the manufacturing sector has indicated mostly steady trends for Q4 2024 as all sub sectors saw an increase or decrease of less than 10% of the QoQ EV/EBITDA multiples.
• The industry experienced weak demand especially in the end markets of Energy, Packaging, and Aerospace & Defense applications which have resulted in a negative impact to sales for manufacturing firms within this industry.
  • • However, industry tailwinds were primarily driven by the Agriculture & Water and Diversified Manufacturing niches, which experienced the most significant quarter-over-quarter increases in 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.
• Furthermore, following the result of the recent US elections, American manufacturers are optimistic about potential growth and revitalization in American manufacturing under the new Trump administration, however, uncertainties remain regarding trade policies and regulatory changes that could affect various subsectors differently.
  

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Reach out to Dinan Capital Advisors Managing Director Tom Gerlacher for more report insights.