Learn why US execs are focused on the now while looking to stabilize and reimagine their business.
One persistent theme we’ve seen in a decade of surveying C-suites for the EY Global Capital Confidence Barometer (pdf) is that the United States is often “ahead of the curve”: trends in macroeconomics, business confidence and dealmaking tend to appear here before reaching other global economies. We saw it throughout the 2010s: M&A activity came back sooner after the Great Recession in the US than elsewhere, and US boardrooms first contended with shareholder activism and with the tech-driven blurring of sectors.
The 2020s, at least for now, are different: The US finds itself in catch-up mode as COVID-19 has reached our shores after already rampaging through Asia and continental Europe, upending daily realities and instigating a shock to business unseen in the modern era. We are all quickly learning that there is no handbook for a pandemic-triggered business slowdown that affects human health and well-being all at the same time.
Speaking of the lack of a handbook, this edition of our Barometer is itself unusual: It does not offer our regular US-level data breakdown, for the simple reason that COVID-19 changed everything in the middle of our survey period. Perspectives are evolving week by week and even day by day, with US business leaders seeing the most acute impact later than their global counterparts.
For the record, before we shut down our survey, US executives were fairly bullish on dealmaking, with nearly 60% telling us they were planning to pursue deals in the next 12 months. For companies with the healthiest balance sheets, these M&A plans may well hold steady, but for the moment, most are focused on protecting cash and shoring up their own businesses. Market observers expect this to be the slowest M&A year in at least a decade but are nonetheless optimistic dealmaking will boomerang back within 12 to 18 months, if not sooner.
Regardless, executives know soon enough a new normal will emerge, with sectors and companies affected by this crisis to varying degrees. And all the best practices the Barometer has revealed over the last decade — from the value of relentless portfolio review to the balancing of both organic and inorganic growth measures — come into play in a crisis like this. Even as the ultimate outcome is both unprecedented and unpredictable, the US business leaders we talk to know they must take action.