The Future Looks Bright for Business
By Steve Jacobs
The last few years have been record-breaking for mergers and acquisitions. In a 2018 poll conducted by The Wall Street Journal, 60% of executives expected to see an economic downturn in 2019, which has not happened. Bloomberg Economics is forecasting that the U.S. economy will grow at a modest 2% rate in 2020 as the record-length expansion turns 11 years old next June.
The biggest cloud hanging over the global and Iowa economies is “trade.” Surveys of business confidence declined after trade skirmishes with China and other countries began in early 2018. There are signs headway is being made to begin resolving these issues with our major trading partners in Mexico, Canada and even China.
With historic low interest rates, abundant amounts of capital available, and aging baby boomers, the M&A market should remain robust in 2020 and beyond. The “Silver Tsunami” (baby boomers greater than 65 years old) will continue to create buying opportunities for companies looking to expand and cause significant ownership changes to occur in small and medium-sized, family-owned businesses in the next decade. It is estimated that the Baby Boomer generation, or those born before 1964, own nearly 10 million privately-held companies in the U.S.
At BCC Advisers we are anticipating a very busy next few years, even with a risk of a market correction or downturn. It does not seem that the historic factors to create a recession are currently in place or forecasted. The ride could be a bit bumpy, but the future looks bright for business!