Manufacturing PMI Falls Despite Production Growth in Key Industries
The Manufacturing Purchasing Manager Index (PMI) registered 48.4%, a second straight month of contraction after 30 straight months of expansion. However, the Backlog of Orders Index was 1.4 percentage points higher than in November, although still at contraction levels. Despite the overall manufacturing contraction, four industries - Primary Metals; Electrical Equipment, Appliance & Components; Machinery; and Transportation Equipment - remained resilient and reported growth in the Production Index.1
Caterpillar's Demand for Construction Equipment Increase Sales
Caterpillar’s sales in Q4 increased 21% due to rising demand for its engines and equipment for mining, construction, transportation, and energy generation. Machinery and engine sales in North America grew by 33% relative to Q4 2021. Demand remains strong across most of the company’s end markets, expanding sales to $15 billion in the quarter, primarily due to price increases aimed at mitigating rising costs.2
U.S. Car Makers Invest Billions into EV Factories
As of November, $33 billion is planned for investment into new U.S. factories producing electric vehicles and batteries. Car makers are planning the U.S. factories as electric vehicle demand grows and new federal subsidies promise lower manufacturing costs. A large portion of the investments in manufacturing are directed toward southern states. Apart from developable land, these states offer less expensive energy than traditional manufacturing states, a significant factor for this energy-intensive industry.3
Mining Costs Reach Highest Levels in Decades
Mining operational and capital expenditure costs are at 20-year highs due to record-high inflation. Mill and underground expenditures are a significant source of inflation for the industry due to expensive equipment, the use of fuel and explosives, and deeper mining. Although expenditures are at all-time highs, employment and labor costs have grown mildly, and demand for mining products continues to accelerate.4
Largest Transactions Closed
- Substantially All Assets of Ahern Rentals, Inc. and Xtreme Re-Rental, LLC
- United Rentals (North America), Inc.
- H.I.G. Capital, LLC
- Resolute Industrial, LLC
- Aggreko, LLC
- Fori Automation, Inc.
- Lincoln Electric Holdings, Inc.
- Durex Industries, Inc.
- Spirax-Sarco Engineering plc
- GGB, Inc.
- The Timken Company
- Lee Container Corporation, Inc.
- Greif, Inc.
- Arcosa Tank, LLC
- Black Diamond Capital Management, L.L.C.
- One Source Equipment Rentals, Inc.
- H&E Equipment Services, Inc.
- Dosatron International, Inc.
- Ingersoll Rand Inc.
Other Financial Buyer Transactions Closed
- Quality Valve, Inc.
- The Stephens Group, LLC
- Bulk Lift International LLC/Bagwell Supply Ltd
- New Water Capital, L.P.
- Centric Machining Solutions LLC
- Continuim Equity Partners
- A. Stucki Company
- Stellex Capital Management LLC; Eldridge Industries LLC
- Algus Packaging, Inc.
- Mereo Capital Partners, LLC; Hyperion Capital Partners
- Tide Tamer Industries, Inc.
- MPE Mgt. Co., Llc; Waterfront Brands, LLC
- SixAxis, LLC
- MiddleGround Management, LP
Other Strategic Buyer Transactions Closed
- Substantially All of the Assets of Spencer Aerospace Manufacturing, LLC
- Park-Ohio Holdings Corp.
- Vandermeer Forest Products, Inc.
- Senior plc
- Ecoverse Industries LLC
- BlueLinx Corporation
- Peerless Machinery Corp.
- Alta Equipment Group Inc.
- Municipal waterworks division of Trumbull Industries, Inc.
- Hillenbrand, Inc.
- Substantially all the assets and operations of TowHaul Corporation
- Core & Main, Inc.
- Substantially all of Circle 8 operating assets
- Federal Signal Corporation
- Unimacts Global, LLC
- Ault Alliance, Inc.
- VT Halter Marine/ST Engineering Halter Marine Offshore
- Zetwerk Manufacturing Businesses Pvt. Ltd.
- skyTran, Inc.
- Bollinger Shipyards, L.L.C.
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes