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This year’s M&A forecast: party cloudy but a good chance of continued high-value deal-making, particularly in the tech, healthcare and energy sectors.

A report from Moody’s analysts on Tuesday said that despite global risk factors including Brexit, the Trump administration and a slate of high-stakes European elections, M&A activity will continue at a “robust” clip, as companies attempt to circumvent sluggish economic growth and seize the chance for cheap financing made possible by low interest rates.

There are a lot of unknowns hanging over 2017, but M&A activity overall is expected to remains strong, if perhaps a bit lighter than 2016, Moody’s said in its report. Generally, the total value of deals will remain high, even as the overall number of deals declines, in line with last year, which saw an average of 563 deals a quarter at an average size of $472m apiece, compared to a five-year average of 585 deals a quarter worth an average of $392m.

Graph: Moody’s

From 2014-2017, tech, healthcare and energy sectors saw the most M&A activity, a trend that is likely to continue into 2017 as companies may look past some of the deals’ credit-negative short-term implications to longer-term benefits, the report said.

Telecoms, too – which entered the spotlight in 2016 with AT&T’s $85.4bn bid for Time Warner – will also likely continue to see M&A activity pick up thanks to that sector’s low potential for revenue growth, market saturation and fierce competition, Moody’s analysts said. While those deals may offer some attractive perks, they “often come at a high cost,” the report said, particularly as increasing consolidation draws more scrutiny from regulators.

Antitrust concerns may also derail any large-scale tie-up attempts amid US airlines and in the North American rail sector, according to the report.

One key factor that could influence the deal-making environment in 2017 is the Federal Reserve, although the central bank’s actions are unlikely to close the spigots of low-cost financing that is helping to fuel M&A activity, the report added:

Two factors have helped enable recent M&A transactions: low interest rates, and the US Federal Reserve’s quantitative easing program. Low interest rates limit the cost of financing business combinations, and quantitative easing has created ample liquidity for US corporate finance, ensuring a robust supply of low-cost credit. While the Fed may increase its benchmark rate a couple of times in 2017, even a half-percent cumulative increase would leave rates well below historic norms. Similarly, while the Fed has discussed cutting its asset holdings, thereby reducing systemic liquidity, the transition will be slow, with only a gradual reduction in funds available to support credit.

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