Power & Utilities: Capital Confidence Barometer

Economic confidence to support small cap deals

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October 2014 | 11th edition

Power & Utilities Capital Confidence Barometer

Economic confidence to support small cap deals

Amid sustained economic confidence, portfolio realignment and digital transformation agendas are set to influence investment decisions.

Our 11th Power & Utilities (P&U) Capital Confidence Barometer has again provided a fascinating insight into the issues likely to impact utilities’ capital agendas over the next 12 months.

Based on fundamental indicators such as confidence in the global economy, corporate earnings and employment expectations, the survey results show optimism in our sector:

  • 96% of P&U respondents perceive the state of the global economy to be either stable or improving
  • 68% remain confident about corporate earnings
  • The number of utilities expecting to hire staff over the next 12 months has increased by 66% compared to the last six months

It’s not surprising that the percentage of utilities expecting their deal pipelines to increase over the next 12 months has risen from 28% in April to 63% in October 2014.

However, there has been a clear shift in the type of deals that utilities expect to undertake, away from billion-dollar-plus deals toward middle-market deals. Global political instability was chosen by 43% of respondents as the biggest risk to utilities over the coming 12 months, up from 27% since our last survey.

Key findings

Key highlights


EY - Key findings

About this survey

The Global Capital Confidence Barometer gauges corporate confidence in the economic outlook and identifies boardroom trends and practices in the way companies manage their Capital Agendas — EY’s framework for strategically managing capital.

The results are based on responses from more than 1,600 global executives from 62 countries surveyed over August and September 2014, conducted by the Economist Intelligence Unit (EIU).

Respondent profile

  • Panel of 91 P&U executives in 62 countries; more than 60% were CEOs, CFOs and other C-level executives.
  • Respondents belong to P&U companies with annual revenues ranging from less than US$500m to greater than US$5b, as follows: <US$500m (12%); US$500m—US$999.9m (21%); US$1b—US$4.9b (44%); and >US$5b (23%).
  • Global company ownership was publicly listed (63%), privately owned (24%), government/ state-owned (9%), family-owned (2%) and PE/portfolio-owned (2%).

Resources

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