BDO Capital Q4 2024 Electronic Contract Manufacturing Services M&A Market Update

The electronic contract manufacturing services (ECMS) sector saw lackluster equity performance throughout 2024, despite a banner year for the broader S&P 500 market. Public equity investor sentiments were mirrored by a lull in M&A activity. ECMS equities outperformed public markets throughout the first half of 2023, largely driven by gains in the medical device segment, but have failed to keep up with the wider market bull run since. Overall sentiment of industry participants continues to be cautious or pessimistic, with 42% of participants reporting declining profit margins – compared with 10% reporting margin expansion, and 50% of participants citing rising labor costs as a key factor.