Industrial Technology &Engineered Products
Industry Insights
Spring 2024

2.1mnworkers are missing from the U.S. labor force
compared to Q1 2020

64%

of surveyed manufacturers anticipate increased nearshoring or on-shoring efforts through 2030

84%

of surveyed participants anticipate increased
automation solutions throughout the decade56%

of strategic initiatives through technologicaladvancement are focused within two to five years

Executive Summary

Sources: U.S. Chamber of Commerce Analysis, Manufacturing in 2030 Project – Survey Results

2Executive SummaryOverview• Global manufacturing is expected to exhibit robust growth while navigating regulatory, economic and supply chain uncertainties.
Businesses are leveraging technological innovations to establish more responsive and resilient supply chains, helping them adapt tochanging market conditions, anticipate disruptions and increase production efficiencies. The continued investment in technologicalinnovation suggests that businesses are not reacting to short-term challenges but instead are strategically positioning themselves for longterm success.
• Collaborative supply chains require organizations to effectively manage both machines and humans–developing strategies that are bothtech-driven and human-centric.
• Economic trends indicate a shift toward domestic manufacturing and a necessity to train employees for the integration of automatedprocesses.

December 2023 orders of manufacturing technology outperformed
analysts' best expectations, totaling $491 million, up nearly 22% from
November 2023, and nearly 12% above December 2022.

Read More

Reshoring efforts by domestic manufacturers and implementation ofadvanced automation are among trends shaping the future of themanufacturing industry.

Read More

Sources: The Association for Manufacturing Technology, Manufacturing Today, Material Handling Institute*All trademarks, trade names or logos referenced herein are the property of their respective owners.

3

Market Update

Economic Corner: Trends in Labor Dynamics
The pervasive labor challenges of industrial manufacturing create significant opportunity forautomation adoption
 Labor costs are impacting margins while unfilled roles are cutting into productivity.
 An estimated 25% of all U.S. manufacturing workers are 55 and older, with many retiring every day.
 Approximately 65% of industry leaders recently agreed that the skills needed for technology enabledmanufacturing jobs are outpacing the current workforce.
 In total, 36% of manufacturing frontline workers felt they were not equipped to adapt to digital tools andtechnology.

Sources: U.S. Chamber of Commerce Analysis, U.S. Bureau of Labor Statistics, Analysis of Data from O*Net

5

Economic Corner: Trends in Labor Dynamics
Labor Force Shortage Challenges – December 2023
Attracting Younger People tothe Industry
10%High Turnover Rates

Can’t Hire EnoughPeople

13%

14%

What Is YourTop LaborChallenge?

34%

Multitude of labor factors impacting
the manufacturing industry

Labor Costs AreIncreasing

2.1 million workers are missing fromthe U.S. labor force compared toFebruary 2020

28%
Prospective Employees Don’t
Have the Right Skills

Projected Open Roles for Manufacturing Companies, 2019 – 2029
Assemblers and Fabricators

113,200

First-Line Supervisors of Production and Operating Workers

56,900Inspectors, Testers, Sorters, Samplers and Weighers

48,300Helpers–Production Workers

44,100Welders, Cutters, Solderers and Brazers

43,400

Packaging and Filling Machine Operators and Tenders

40,600Industrial Machine Operators and Tenders

40,500Machinists
Sources: U.S. Chamber of Commerce Analysis, U.S. Bureau of Labor Statistics, Analysis of Data from O*Net

38,0006

Economic Corner: Trends in Technological Advancement
The Manufacturing Leadership Council surveyed over 260 senior manufacturing industry executives

 Survey participants predicted machine learning and collaborative robots will have the greatest impact on
manufacturing and production operations by 2030.
 Greater speed and flexibility and greater customer satisfaction are the most prevalent aspirational
outcomes to autonomous operations.
 Approximately 68% of survey participants believe factories and plants will become largely autonomous by2030, requiring significant capital investment over the next decade.
 About 56% of strategic initiatives are focused within a two– to five–year time frame.

Sources: Manufacturing in 2030 Project – Survey Results

7

Economic Corner: Trends in Technological Advancement
Acceleration of Manufacturing Technology – Surveyed Results
The Pace of Digital Adoption Will Accelerate throughout the Decade

84%

The Pace of Digital Adoption Will Be More or Less the Same13%

The Pace of Digital Adoption Will Slow Due to Lack of Funding, Skills or Other Factors

2%

Don't Know1%

Desired Outcomes by Addressing Technological Advancement – Surveyed Results
Greater Speed and Flexibility

81%

Greater Customer Satisfaction

76%

Higher Financial Returns

63%

Larger Market Share44%

Increased Industry/Social Reputation
Better Valuation/Stock Price
Sources: Manufacturing in 2030 Project – Survey Results

20%
16%
8

Economic Corner: Trends in Near- and On-Shoring
Geopolitical risks incentivize U.S. manufacturers to minimize supply chain costs and disruptions
through near- and on-shoring On-shoring efforts aim to reduce dependency on foreign suppliers and mitigate supply chain disruptions.
 An increase in domestic manufacturing will foster innovation and quality improvement across localindustries.
 More than a third of U.S. imports, valued over $3 trillion, come from Mexico, China and Canada.
 Between 2022 and 2023, the value of goods imported to the U.S. from Mexico rose 5%, while Chinese
imports fell 20%.

Sources: Business Insider, U.S. Bureau of Economic Analysis

9Economic Corner: Trends in Near- and On-Shoring
Anticipated Production and Supply Chain Networks in 2030 – Surveyed Results

More Near-Shoring

36%More On-Shoring28%

No Significant Changes Planned

28%

More Off-Shoring

9%

Mexico Surpassed China in Terms of U.S. Imports in 2023
CountryMexico

ChinaCanada

Percentage of U.S. Tariffs

15.0%

14.6%

13.0%

Advantages to Mexican Imports

Disadvantages to Chinese Imports

Geographic Proximity

Economic Tension

Zero Tariffs

High Tariffs

Low Labor Costs

Security Concerns

Relatively Mature Manufacturing Base

Lower U.S. Production Output

Sources: Manufacturing in 2030 Project – Survey Results, Business Insider, U.S. Bureau of Economic Analysis

10Relevant Kroll ExperienceSelect Experience in the Industrial Technology Sector
Selected Case Studies
SELL-SIDE ADVISOR

has been acquired bya division ofSELL-SIDE ADVISOR

has been acquired byAdditional Industrial Technology and Engineered Products Experience
Simplimatic Automation is one of
the leading suppliers of robotic andconveyor automation solutions inNorth America. The company
manufactures and integrates thehighest-quality material handlingand conveyor systems, advanced
robotics, autonomous mobile robots
and customer automation systems.

Classic Design is an end-to-end
designer, developer and integratorof custom automation solutions tocustomers in the automotive anddefense sectors. The company has
a global footprint across the U.S.
and India.

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

has been acquired byhas been acquired bya portfolio company ofSale of Oxford Instruments’Industrial Analysis business to

has been acquired by

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

SELL-SIDE ADVISOR

a portfolio company ofhas been acquired bya portfolio company of*All trademarks, trade names or logos referenced herein are the property of their respective owners.

has been acquired byhas been acquired byhas been acquired by

12For more information, please contact:

Steve Burt
Global Head of M&A Advisory
Chicago+1 312-697-4620
steve.burt@kroll.com

David Althoff
Global Head of Diversified Industrials M&A
Chicago+1 312-697-4625
david.althoff@kroll.com

Jeffrey McNamara

Dr. Howard E. Johnson

Andreas Stoecklin

Dafydd EvansManaging Director, Canadian M&A Advisory

Head of Corporate Finance, EMEAManaging Director, United Kingdom M&A Advisory

TorontoFrankfurt

London+1 416-597-4500+49 69 719184 0+44 20 7089 4840

howard.johnson@kroll.com

andreas.stoecklin@kroll.com

dafydd.evans@kroll.com

Managing Director, Diversified Industrials M&AChicago+1 312-697-4638
jeffrey.mcnamara@kroll.com

A b o ut K r o l l
As the leading independent provider of risk and financial advisory solutions, Kroll leverages our unique insights, data and technology to help clients stay ahead of complex demands. Kroll’s global team continues the firm’s nearly 100-year history oftrusted expertise spanning risk, governance, transactions and valuation. Our advanced solutions and intelligence provide clients the foresight they need to create an enduring competitive advantage. At Kroll, our values define who we are and how wepartner with clients and communities. Learn more at www.kroll.com.
M&A advisory, capital raising and secondary market advisory services in the United States are provided by Kroll Securities, LLC (member FINRA/SIPC). M&A advisory, capital raising and secondary market advisory services in the United Kingdom areprovided by Kroll Securities Ltd., which is authorized and regulated by the Financial Conduct Authority (FCA). Valuation Advisory Services in India are provided by Kroll Advisory Private Limited (formerly Duff & Phelps India Private Limited), under acategory 1 merchant banker license issued by the Securities and Exchange Board of India.
The material in this report is for information purposes only and is not intended to be relied upon as financial, accounting, tax, legal or other professional advice. This report does not constitute, and should not be construed as soliciting or offering any
investment or other transaction, identifying securities for you to purchase or offer to purchase, or recommending the acquisition or disposition of any investment. Kroll does not guarantee the accuracy or reliability of any data provided from third-party
resources. Although, we endeavor to provide accurate information from third party sources, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.
© 2024 Kroll, LLC. All rights reserved.

Download Our
Exclusive Valuation
Data to Learn More:Kroll.com/Industrials-Technology-and-Engineered-Products-Spring-202414