Power and utility execs give economy a big thumbs up
A survey of more than 200 global power and utility executives found 67% believe the economy is improving â€“ a 20% increase over six months ago. That's one finding from a new report -- Capital Confidence Barometer: Power & Utilities â€“ from Ernst & Young (EY).
Other survey highlights:
Â· Half of power and utility executives say growth is their top priority, up for 40 percent a year ago.
Â· 93 percent consider credit either stable or improving â€“ the highest levels in two years.
Â· 69 percent expect deal volumes to improve
Â· 28 percent plan to pursue an acquisition
That alignment of economic confidence, credit availability and focus on growth favors higher transactional activity, EY suggests. That means as utilities continue to reshape their portfolios and look to newer markets and services, it should drive a more robust M&A climate in the year ahead.
According to Matt Rennie, Matt Rennie, Global Transactions Power & Utilities Leader at EY, the top investment destinations are Brazil, India, Canada, South Africa and Chile are the top five opportunities.
But it's not all rosy on the financial front. Notes Rennie: "Confidence in corporate earnings has dropped, reinforcing our view that weak energy demand and depressed wholesale energy prices, particularly in Europe, combined with over-leveraged balance sheets are creating pressure on earnings."
The free report is loaded with interesting factoids; you can download the pdf here.
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