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12/03/2021

Latest News Australian Economy Will Overperform in 2021

The latest news in the Australian economy; research conducted by Pitcher Partners in Sydney shows that the Australian economy is showing signs of recovery following a slump during the worst of the COVID-19 pandemic. The research found that mergers and acquisitions especially are tipped to surpass pre-COVID levels within a year. 

The survey of business executives found that the majority of respondents gave Australia an 81% confidence score when asked to evaluate the current market for merger and acquisition opportunities. However, despite an increase in confidence, acquisition managers are unwilling to pay higher rates for deals, instead relying on lower prices and higher risk premiums to negate the economic fallout of the pandemic.

The results of the research demonstrated that 62% of respondents expected the Australian mergers and acquisitions market to bounce back to pre-COVID levels by the end of 2021. Most dealmakers (98%) agree that business in the tech sector in particular will increase in the year ahead. Signs of recovery are already being witnessed, with the second half of 2020 demonstrating a sharp increase in deal volumes. Deal values bounced back especially strongly during the final three months of the year.

Sentiment is particularly strong towards Australia’s mid-market (deals valued between $10 million and $250 million), with 65% of survey respondents saying Australian mid-market opportunities are better than other markets. A majority of respondents are actively searching out such deals. Issues preventing entry into the market include valuations and the gap between available buyers and sellers. There seems to be some disagreement regarding the current financial value of companies undergoing mergers and acquisitions as a result of the COVID-19 circumstances.

Indeed, the COVID-19 pandemic has had a wider effect on the Australian economy than just in the business development sector. In Melbourne, the CBD property market in particular is expected long-lasting effects of lockdown. Suburban property sales have increased throughout the climax and conclusion of Melbourne’s lockdown, however inner-city apartments are experiencing higher vacancy levels than ever before. People simply are not returning to the city following the end of lockdown, despite a general sentiment of wanting to return to work as normal.

If you are looking for the latest news Australian economy, you do not need to look any further. Pillar Financial will be happy to take your call and advise you on your financial situation. Property investors in particular may benefit from our advice as we are specialists in the Melbourne property economy. Please call us on 1300 730 309 with any questions. We look forward to receiving your call.