Aerospace suppliers need to assess how a dip in M&A activity will affect them.
Key takeaways
Companies must evaluate the risks in their existing supply chains and consider strategic shifts.
Auto producers need to develop strategies to attract, engage and develop the workforce.
Manufacturing trend #1: Aerospace sector M&A: Impacts on the supply chain
Interest rates and the cost of capital are suppressing deal flow across the spectrum. In the absence of lower rates, which do not appear on the horizon given RSM’s economic forecast of one additional rate cut in 2025, this isn’t likely to improve.
Mergers and acquisitions have been reshaping the aerospace sector since 2021. These activities are influenced by supply chain challenges, regulatory pressures and market positioning. With the M&A outlook in this space starting to decline, aerospace suppliers need to assess how that dip will affect them.
Manufacturing trend #2: Securing supply chains: The rise of friendshoring in modern manufacturing
Friendshoring is becoming a crucial strategy for manufacturers to enhance supply chain resilience, especially as the global trade environment becomes more complex and uncertain. Disruptive events of recent years—including the pandemic, the Red Sea shipping crisis, the Russia-Ukraine war and ongoing conflicts in the Middle East—have prompted companies to rethink their sourcing strategies to address heightened supply chain risk. With the new U.S. administration’s nationalist trade agenda focused on reshoring manufacturing, protecting national security interests and correcting unfair trade practices, companies must prioritize evaluating the risks in their existing supply chains and consider strategic shifts into U.S.-friendly countries.
Manufacturing trend #3: Navigating the road ahead: Automotive industry trends for 2025
The automotive sector is in a transformative period, adjusting to slower sales growth and ongoing margin pressures while also navigating the transition to electric vehicles. The acceleration of software-defined technology developments, tight global competition and evolving industrial policies add to the shifting market dynamics. Facing all these changes, automakers and suppliers need to adapt their operations and investment strategies, identify new growth drivers, and rightsize production levels and product mixes. All of this will enable companies to continue innovating, stay competitive and drive profits.
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