Industrial Distribution M&A volume in Q1 2021 fell behind equivalent 2020 levels domestically but showed an increase globally. 2021 YTD US Industrial Distribution M&A activity decreased 22.8% to 61 transactions. 2021 global activity drove past 2020 levels, increasing 13.0% to 200 transactions.
When comparing quarter-over-quarter, both US and Global Industrial Distribution M&A saw a decrease. US levels decreased 35.8% vs only 3.8% globally. This pull back is likely a normalization of the market, as Q4 2020 saw an extreme uptick in activity, marking a two-year high. In addition, M&A volumes continue to bounce back and normalize to pre-COVID levels, reflecting both market optimism and willingness to grow via acquisitions.
Manufacturing indicators rose in Q1 2021 after remaining in contractionary territory through the majority of 2020. The Institute for Supply Management (“ISM”) New Orders Index increased to 68.0 in March 2021. The ISM Purchasing Managers’ Index increased to 64.7, up from 60.5 in December 2020. The ISM Production Index increased to 68.1 in March 2021, representing 10 straight months of expansion. The Chicago Fed Midwest Economy Index, which measures non-farm economic indicators, increased to 0.6 in March 2021, indicating above-average growth for the Midwest economy.
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