Morrissey says the slowdown in sector deals “mirrors the larger economy,” with overall business acquisitions down almost 10% last year. He says uncertainty in a presidential election year had not been a key factor in deal rates in the prior two election cycles and points to growing buyer selectivity. “It would appear that the industry is now in a buyer’s market, and sellers may start to see downward pressure on valuations,” says Morrissey. “It’s counter to everything we have seen … so we’re in a brave new world.”

Steven Gido, a principal at Rusk O’Brien Gido + Partners, says his firm’s analysis shows a 4% AE deal drop in 2016, with “fewer ENR 500” deals “but plenty of activity [among] targets with less than $10 million in revenue.” Gido says he is “optimistic that 2017 will be a year of mid-single-digit percent gains” in industry M&As. Andrej Avelini, managing director of deal broker EFCG, agrees that deal-making among mid-size and small firms “remains as strong as ever,” but he notes that some overseas clients “put some North American deal assignments on hold.”