EY Capital Confidence Barometer
Strong 2014 in New Zealand lays platform for 2015
30 April 2015 - EY’s Capital Confidence Barometer is a regular survey of senior executives from large companies around the world conducted by the Economist Intelligence Unit (EIU).
Our 12th Barometer provides a snapshot of our findings, gauges corporate confidence in the economic outlook, and identifies boardroom trends and practices in the way companies manage their Capital Agenda.
Key findings for New Zealand
- 100% of New Zealand respondents believe the local economy is stable or improving and see sustained momentum in the broader global economy
- 71%, compared to 29% globally, are looking to create jobs or hire new talent in the next year, as companies seek new capabilities to resource growth plays
- 51%, compared to 21% of global respondents, say technology (including digital) is disrupting all areas of enterprise, impacting both core business and M&A strategies
- Over half of respondents locally and globally have a rigorous focus on core, reducing costs and improving operational efficiency in a low inflation environment
- Key economic risks highlighted as the slowing growth in emerging markets, commodity pricing volatility and uncertainty over political and tax environments
Stability is the name of the game in New Zealand. The New Zealand dollar is relatively strong and local businesses continue to feel confident in a strong economy based on expectations for short term market stability and stable corporate earnings. This aligns with forecasts from the RBNZ of GDP growth at 3%, low inflation and falling unemployment. Whilst confidence base is strong, fewer than those six months ago are expecting improvement, supporting a balanced view of stability.
Following a stellar 2014 for M&A with small, mid-size and major deals and 12 main board NZX new listings, there are indications of a pause. However market conditions remain conducive to deal-making. Deal pipelines and future deal intentions remain solid, to acquire talent, technology and turnover in support of longer-term growth strategies, whilst international acquirers continue to see New Zealand as an attractive market for investment.
“Innovation, infrastructure investment and digital futures are driving core business and acquisition strategies” notes Andrew Taylor, New Zealand Transactions Leader “with the outlook for the next 6 to 12 months being a continuation of a general positive view with a watchful eye on what a slowdown in the Australian economy means for local capital markets and M&A opportunities.”
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This news release has been issued by Ernst & Young New Zealand, a member firm of Ernst & Young Global Ltd.