Oil and gas capital confidence barometer

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Our eighth Global Capital Confidence Barometer shows a clear rebound in corporate confidence. After years of conservative decision-making, executives are steadily trending toward an investing agenda. But are companies being bold enough?

Expectations for global economic growth, corporate earnings and credit availability are at some of their highest levels in two years. Broader equity markets had a strong first quarter of the year in just about all geographies.

Normally, this positive sentiment would translate into significant capital investment and M&A activity. However, our respondents are gravitating toward lower-risk value-creation and growth strategies.

The current situation can best be described as a confidence paradox — a disconnect between confidence and M&A activity.

Before the financial crisis, economic sentiment and M&A activity moved in harmony. However, in the “new normal” economy, these indicators are decoupled. Macroeconomic risks, such as the Eurozone crisis, US sequestration and slowing emerging markets growth, have given companies pause.

Consequently, some of the world’s richest and most mature economies, which would be expected to lead a recovery, lack confidence within their borders, lowering appetite for capital investment worldwide.

Key findings for oil and gas

  • More than 44% feel that the global economy is strongly or modestly improving, up sharply from just 27% six months ago.
  • Confidence in the local economy is also up modestly.
  • Credit market tightness is notably easing.
  • The oil and gas M&A appetite is improving compared to six months ago.
Andy Brogan

Andy Brogan
Global Oil & Gas
Transaction Advisory Leader

Pip McCrosite

Pip McCrosite
Global Vice Chair
Transaction Advisory Services

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