Corporate executives are hesitant to pull the trigger on new acquisitions despite indicating they believe the global economy is improving somewhat, according to a survey of more than 1,500 executives polled by Ernst & Young.

Only 31 percent of the executives polled for Ernst & Young's sixth Global Confidence Barometer survey said they expected to pursue an acquisition over the next 12 months -- the lowest level since the firm began the survey in 2009.

That is down from 41 percent of the respondents in the previous survey, which was released last October.

There's a view after two and a half years of sustained volatility that this is not your typical recession; therefore, where possible [executives] will opt for safer, more conservative routes to create value, Pip McCrostie, global vice-chair of transaction advisory services at Ernst & Young, said in an interview.

The survey, while forward-looking, reflects an already weak market for mergers-and-acquisitions activity. The first quarter of this year had the least amount of M&A activity of any quarter in seven years, and worldwide M&A activity is down roughly 32 percent year-to-date.

More than one-half of the executives, who came from 57 countries and 40 sectors, feel the global economy is moderately improving.

It's a modest increase in confidence, McCrostie said, noting that improved employment and access to credit were two important factors in boosting the executives' perception of the economy as a whole.

Still, McCrostie said that worries about the euro zone, persistent volatility, austerity measures, and potentially slowing growth in emerging markets are weighing on executives and holding down their enthusiasm for acquisitions.

There is increased investor scrutiny. When you do a deal now, there's a lot more focus on did you do it well, she said. There is concern coming through the 1,500 respondents that actually executing a deal well, ensuring that you've got the synergies, is still pretty difficult to do.

Asset Sales Rising

Enthusiasm for asset sales is rising, with 31 percent of the survey's respondents saying his or her company is likely to make a divestment in the next 12 months. That is up from 26 percent in October, as companies look to drop noncore assets and pick up cash in the relatively difficult economic environment.

With drooping expectations for acquisitions and rising appetite for asset sales, McCrostie said that private equity could help pick up the slack.

I think we will see private equity step in and be a lot more active because there are a lot of quality assets available. There are a lot of houses, both American- and EMEA [Europe, Middle East, and Africa]-headquartered, that have raised new funds and are poised in certain sectors to pick up those assets, McCrostie said.

Executives from the financial-services, life-sciences, oil-and gas, technology, and consumer-products sectors more often said they were likely to do deals, while those from the metals and mining, automotive, and power and utilities sectors were less positive in their M&A outlook.

Respondents from companies headquartered in India, the U.K., the U.S., and Germany were among the most optimistic, according to Ernst & Young, while those from Japan and Russia were less so.

Nobody is going to put their head above the parapet unnecessarily in a market like this with what seems like almost permanent volatility continuing for the foreseeable future, McCrostie said.