Industrials M&A update: Q4 2025

Customer purchasing behavior remained cautious, with manufacturers prioritizing inventory discipline, shorter ordering cycles, and limited forward commitments.

Industrial trends

  • Automotive
    Vehicle pricing remained elevated in the quarter, with average new-vehicle transaction prices around $50,000, as OEMs leaned into higher-margin trucks, SUVs, and premium trims to protect profitability.1
  • Engineering and construction
    US construction activity showed signs of stabilization in Q4, with total construction spending running at approximately $2.17 trillion (annualized), though still down about 1% year over year amid elevated interest rates.2
  • Distribution, transportation, and logistics
    Freight demand remained soft entering year-end, with shipment volumes down roughly 6%–8% year over year, reflecting continued weakness in industrial production and goods-based consumption.3
  • Metal, plastics, and paper packaging
    Plastics and resin pricing remained elevated but relatively stable, providing improved cost visibility and planning certainty for converters and downstream packaging manufacturers.4
  • Specialty channels
    Specialty chemical production softened late in the year, with US chemical output declining about 1% in October and November 2025, driven by macro uncertainty and weaker industrial end-market demand.5

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References

1 US Bureau of Economic Analysis, Total Vehicle Sales (TOTALSA), retrieved from Federal Reserve Bank of St. Louis (FRED), accessed January 19, 2026.

2 US Census Bureau, “Monthly construction spending: October 2025,” press release, January 21, 2026.

3 US Bureau of Transportation Statistics, “Freight Transportation Services Index,” accessed January 19, 2026.

4 US Bureau of Labor Statistics, “Producer Price Index: Plastics Material and Resin Manufacturing,” retrieved from FRED, accessed January 19, 2026.

5 Harris Williams, Chemicals & Specialty Materials Q4 2025 report, October 8, 2025.

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