General Industrials Industry Update & Industry Leader Benchmarking

H1 2023 Update and H2 2023 Outlook

In the first half of 2023, global economic uncertainty continued from Q4 2022, as highlighted by the collapse of Silicon Valley Bank, Signature Bank, and First Republic in the U.S., and the government-sponsored takeover of Credit Suisse in Europe. Despite these historic events, public markets proved resilient, with the Dow Jones Industrial Average increasing 3.8% in H1 2023 and the S&P 500 rising 17.1%. Comparatively, the Intrepid General Industrials Index increased 5.5% in H1 2023.

While public markets have largely held up in the first half of 2023, an expected short, shallow recession is still causing investors in both the public and private markets to act with caution. H1 2023 saw a contraction globally in both the volume of transactions and the total value of invested capital, (24%) and (33%) respectively, compared to H1 2022. We expect M&A activity for industrial companies in 2023 to be restrained, but steady, largely driven by middle-market corporations and private equity portfolio companies seeking strategic expansion of healthy platforms and tuck-in acquisitions. Increased M&A activity is expected in H2 2023, with portfolio review and the related divestitures of non-core assets likely to fuel stable deal activity throughout the latter half of the year. Yet, 2023 overall should still see a slight decline year-over year compared to 2022.