PROVIDENCE – Citizens Financial Group Inc. says private equity firms entered 2024 ready to shop, and a study released by Citizens shows many business leaders may be open to making a deal.
Nearly three-quarters (72%) of small and midsize businesses in the U.S. view the private equity industry as a source of current or future partnership and funding, according to the survey. This data comes on the heels of Citizens’ 2024 mergers and acquisitions outlook, which found that sponsors anticipate higher deal volumes in 2024 and expect to buy more than they did in 2023.
“$2.5 trillion of private equity dry powder on the sidelines, elevated buyer enthusiasm and a positive perception of sponsors should support a constructive environment for deal-making,” said Don McCree, Citizens vice chair and head of commercial banking.
The Citizens survey of more than 530 decision-makers at small and midsize businesses was conducted in January and focused on business leaders’ outlook for economic conditions and assessment of key business inputs in the year ahead. Other key findings included:
- Small and midsize businesses are ready to hire in 2024. Sixty-one percent of decision-makers expect their companies to add talent in 2024, and 40% anticipate hiring more personnel than they did last year. Consistent with the findings of the latest Citizens Business Conditions Index, the demand for labor indicates business conditions remain constructive despite lingering anxiety about rising costs. Forty-five percent of respondents expect to be more concerned about the impact of inflation on their business in the year ahead, while just 13% expect to be less concerned.
- Business leaders are not overly concerned about political instability. While political uncertainty is typically perceived as a headwind for businesses, only 9% of respondents expect the 2024 U.S. election cycle to have a negative impact on their company’s growth plans. In fact, 64% actually expect the election cycle to have a positive impact on business growth in 2024.
- Geopolitical tensions are also not considered a major risk. Fewer than 40% of respondents expect geopolitical issues to pose a serious threat to their company’s financial performance in 2024.
- Business leaders remain worried about supply chain disruptions. Thirty-eight percent are more concerned about the impact of supply chain disruptions in 2024 than they were last year, while 51% are similarly concerned, and just 11% are less concerned.
Artificial intelligence is expected to be among the most impactful technologies in 2024. These findings are consistent with insights gleaned from a recent Citizens study that assessed AI trends in financial management.
