Market Pulse Q3 2019

IBBA Q3 _2019-MarketPulse


Business Brokers Say Recession and Political Fears Driving Down Valuations

The recession isn’t here yet, but enough people are talking about it and predicting it that it’s already driving down business valuations, according to 53% of business brokers surveyed in October. Advisors also believe that uncertainty over the upcoming presidential election and trade wars with China are having an impact on the M&A market.

“Main Street transactions can really hinge on business confidence,” said Scott Bushkie, managing partner of Cornerstone Business Services. “We know that business confidence is dropping and that means individual buyers – the people who buy the majority of Main Street businesses – aren’t as active right now.”

“Confidence always gets shaky as we enter an election season,” continued Bushkie. “There’s this general escalation of reports pointing out economic weaknesses and policy flaws, and people sometimes internalize that negativity. I think we may be feeling that even earlier than normal this time around.”