Capital Confidence Barometer, October 2013
Capital Confidence Barometer -- Sector reports
See below for insights into how executives view corporate deal-making in the year ahead.
- Automotive: Rising confidence in economic and employment growth, credit availability and corporate earnings all indicate automotive executives’ positive outlook. We explore these trends in our barometer.
- Consumer Products: Sixty-four percent of consumer products (CP) executives see the economy improving, compared with 51% six months ago and 23% a year ago. CP executives are still putting efficiency and cost control at the top of the boardroom agenda, while there's declining sentiment around innovation and research and development.
- Media & Entertainment: Media and entertainment (M&E) executives expect overall M&A activity to increase from current low levels as the number and quality of acquisition opportunities improve. However, within the industry, executives revealed a lower expectation of acquisition activity as compared to other sectors surveyed.
- Mining & Metals: Mining and metals companies are expressing a desire to grow, although cautiously. Capital allocation and margin improvement is top of mind. However, respondents believe the availability of capital is improving, fuelling optimism about growth.
- Oil & Gas: Economic optimism and confidence underpin a revived growth agenda for oil and gas mergers and acquisitions activity. Our ninth Barometer shows a clear rebound in corporate confidence in the sector. After several years of conservative decision-making, executives are steadily moving toward investing and growth.
- Power & Utlities: The global power and utilities transactions market rebounded in Q3 2013, with deal volumes increasing 25% and reflecting growing economic confidence. Deal value dropped slightly over the quarter, but still increased 67% compared to Q3 2012. Confidence among executives is at its highest point in two years, with 67% believing the global economy is improving, compared to 47% six months ago.
- Private Equity: Economic confidence among private equity (PE) investors is at a two-year high, which should lead to a pick-up in fund-raising and deal activity in the coming year. However, just over half of the respondents say that political instability is the greatest risk to portfolio company growth. Indeed, economic volatility and political instability over the last few years have made PE firms more cautious and they'll keep an eye on developments in these areas.
- Technology: Technology executives’ confidence has increased to its highest level in two years, driven in no small part by confidence around economic growth, wider availability of credit, potential use of excess cash to fuel organic growth and confidence that deal volumes are expected to increase.
- Wealth & Asset Management: While Asset Management executives are slightly less confident on economic growth than their peers, 73% think that the global economy is improving compared with 46% six months ago. They're more focused on regulatory issues and risk management than efficiency and cost control. They're also less positive about prospects for job creation over the next 12 months.