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Corporate executives are much less bullish about the U.S. M&A market when forecasting for the coming year than they were about 2019, a Dykema Gossett survey finds.

A third of the 200 corporate executives who participated in Dykema Gossett's 15th annual M&A Outlook Survey have a positive view about U.S. dealmaking over the next 12 months, compared with two-thirds who had a positive outlook in last year's survey.

Nearly a third of the executives, 32%, are pessimistic about the U.S. M&A market over the next year. Only 15% were pessimistic about the market a year ago.

The results may not be surprising, considering nearly half of the respondents said they think a recession is "at least somewhat likely" over the next 12 months.

"It's been a bull market and there's been an incredible wave of M&A. Everybody expected at some point the party would have to end," said Jeffrey Gifford, a Dykema partner in San Antonio who worked on the survey.

The two greatest threats to M&A activity over the next 12 months are trade tensions with China and U.S. political uncertainty, according to the survey of executives, including CEOs and CFOs, which was made public on Thursday. The survey was conducted in September and October.

While a total of 43% of executives in the survey see trade tensions with China as a challenge for M&A over the next year, they also expect that China will be the country where the most outbound M&A activity will be concentrated over the next few months. After China, the executives expect the most outbound M&A in Europe, Canada and Japan.

In contrast, last year, the executives surveyed forecasted outbound M&A in Europe, Central and South America, Mexico and Canada. China wasn't in that mix.

As for political uncertainty, 38% of the executives predicted that next year's presidential elections would have a negative effect on U.S. M&A. According to the survey, one respondent noted that M&A "paused" in 2016 because of the presidential election. Others expressed worry that a Trump loss would undo the 2017 Tax Cuts and Jobs Act, which they believe has spurred M&A activity.

The executives also said Brexit and reforms that limited foreign investment in the U.S. have delayed deals this year. According to the survey, the executives want Congress to focus on issues such as free trade, immigration, tax reform, the minimum wage, deficit spending and deregulation.

When considering their own companies, the executives said they are less likely to become involved in acquisitions, joint ventures or dispositions over the next 12 months than they have been over the last year. And 58% expect M&A activity involving privately owned businesses to increase over the next year, while last year 82% had that expectation.

Like last year, the executives expect to see the most deals in the automotive, health care, energy, consumer products and technology industries. Energy dropped to the third spot in that list, down from second last year.

2019 has not been a particularly strong year for energy M&A in Texas, which has affected the volume and mix of work handled by Texas lawyers who work in the energy sector. According to oil and gas analytics firm Enverus, the dollar value of energy M&A through the third quarter of 2019 totals $85 billion, a few million dollars more than the total for all of 2018. But that value is skewed by one megadeal: Occidental Petroleum Corp.'s acquisition of Anadarko Petroleum Corp. in August, which was valued at about $55 billion.

Gifford, head of Dykema's corporate finance practice group, said the 2019 survey results will help lawyers and firms focus on the future.

"It's going to help me as I develop my own plan for next year, [determine] which of my clients I will be talking to, which industries to be focused on," he said.

Driving deals in the small and midsize market, Gifford said, is the reality many family business owners are now facing: the decision of whether to transition leadership to the next generation, or plan an exit strategy.

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