Most executives (79%) say the global economy is improving, up from 24% last year, says EY’s latest Capital Confidence Barometer.

Still, many companies are focusing on controlling costs over the next 12 months, it adds.

On the bright side, says EY partner Tony Ianni, some are planning on boosting M&A activity in 2014 and 2015.

Read: Which stocks are hot right now?

The survey finds “41% of executives expect to pursue an acquisition in the next year, up from 33% in October [2013],” he adds. “There’s also more confidence that the valuation gap between buyers and sellers will contract, which means there’s a healthy pipeline of transaction opportunities.”

Read: M&As sluggish in 2013, resource sector to blame

Currently, more than half of companies (66%) have up to three deals in their pipelines, and about 30% are looking at four or more deals.

Even better, the survey found executives are optimistic about corporate earnings, credit availability and short-term market stability.

Read: Positive returns to continue this year

“Companies [are] focused internally on optimizing their businesses,” says Ianni. “They’re…more willing to use debt to finance transactions, and that will hopefully help us return to a more traditional level of acquisition interest.”

He adds, “Economic confidence at home and abroad is high, and other fundamentals remain sound.”


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Originally published on Advisor.ca

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