The February 2018 Manufacturing PMI came in at 60.8, an eighteenth straight reading in expansion territory. We find the PMI to provide a good 3-6 month lead on Industrial Production, indicating a solid demand environment for industrial component manufacturers through the middle of 2018. In spite of political uncertainties (i.e. trade policy), we remain optimistic on M&A for the remainder of 2018.
- Current revenue growth rate exceeds the average of the last 3 years, indicating that market momentum is increasing
- Current gross profit margin exceeds the average of the last 3 years gross profit margin, indicating supplier pricing power
- Current EBITDA margin exceeds the average of the last 3 years EBITDA margin, a condition that may attract new entrants