EY Global Capital Confidence Barometer 2019

The survey of more than 2,900 executives across 47 countries by EY in London, found that technological investment was regarded by many as the key to delivering market agility and resilience.Middle-market executives were also turning to mergers and acquisition to accelerate growth and counter potential disruption to global markets and increasing geopolitical uncertainties.The 20th edition of the EY Global Capital Confidence Barometer found that 58 per cent of respondents expected their companies to record double-digit growth in 2019 - more than double the 28 per cent a year ago.More than 90 per cent also expected global and domestic economic growth to increase over the next 12 months with 83 per cent confident about corporate earnings, short-term market stability and credit availability.Smaller middle-market companies (those with revenues of between $100m-$250m) had even higher levels of confidence, with almost three-quarters anticipating double-digit growth. This contrasted to the 42 per cent of the largest (those with $1bn-$3bn in revenues).

M&A and technology to help middle market-companies gain a competitive edge

Ryan Burke, EY global growth markets leader, said: "Against a backdrop of ongoing geopolitical tensions, trade issues among the US, China and Europe, as well as uncertainty as to how the UK will leave the European Union, middle-market executives remain hugely optimistic in their growth outlook and are taking advantage of ongoing global and local economic growth as well as strong macroeconomic fundamentals."Middle market companies see strong opportunities in leveraging M&A, and the use of technology to gain a competitive edge."

Confidence in economic growth patterns shift west from Asia to the US

The report found that, geographically, confidence had shifted westwards over the past year, with 80 per cent of US-based and 57 per cent of European-based executives expecting double-digit growth over the next 12 months.Last year, Asia-Pacific led the way for growth optimism, but only 39 per cent of middle-market executives in the region voiced double-digit growth expectations for 2019.

Economic growth and development: investment in technology to build resilience against risk

EY said that almost all companies surveyed indicated they would make significant investments on technology over the coming year in a bid to improve their resilience against risks that could negatively impact growth.The report said that the emphasis on technology investment was spread across a range of priorities, including creating new products and services, improving internal efficiencies, enhancing the customer experience and improving data access and analysis."However, risk reduction (including cybersecurity) is a stand-out priority for investment," added EY. "In 2018, only seven per cent of middle-market executives said they would be investing in technology that reduced risks, while this year that percentage has more than doubled, with 19 per cent now looking to invest in technologies that can help them manage and mitigate risk."Mr Burke concluded: "Looking ahead, we anticipate that middle-market executives will focus on achieving their ambitious growth plans through a combination of seizing fast-growth opportunities through M&A, and strengthening financial discipline, managing their supply chains and implementing AI."In finding the right balance between growth and investment, middle-market companies can achieve growth, improve agility and build resilience while navigating the uncertain times ahead."Visit EY's website to read the EY Global Capital Confidence Barometer

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