Companies in the United States are more likely to pursue acquisition deals within the next 12 months than those in Canada – for the first time in two years – EY announced November 21.
A survey of senior executives found that 41% of U.S. companies intend to pursue acquisitions over the next year, while only 33% of Canadian firms feel the same way.
Tony Ianni, transaction advisory services partner for EY, said there is a 'confidence paradox' going on in Canada.
"Canadian executives remain confident in the state of the global economy, and even more confident in the economy here at home," Ianni said. "But that confidence still isn't translating into an uptick in transaction activity."
Ianni said Canadian executives' confidence is continuing to rise, with 98% of respondents saying the Canadian economy is stable or improving, up from 79% last year and from 85% six months ago.
"But deals remain comparatively elusive," he said, explaining there are many factors at play.
"Despite increasing confidence, Canadian companies either seem to be waiting for more favourable economic conditions, for the right deal or, in some cases, for someone else to make the first move."
Other survey findings included:
- 19% expect deals over US$1 billion, while six months ago, no respondents held this expectation;
- 48% expect Canadian deal volumes will increase, down from 66% six months ago;
- 44% intend to focus on investing in emerging markets; and
- 63% consider growth to be their primary focus.
