Today (10 October), Ernst & Young (EY) released its Capital Confidence Barometer Report.

The report is based on a survey of 1000 corporate executives from around the world, with 110 of those respondents based in Australasia.

Despite the relative economic strength of the Asia-Pacific region when compared to the current levels of market volatility in Europe and North America, only 14 per cent of Australasian respondents in the EY report feel positive about growth prospects in the global economy, as compared to 44 per cent of global respondents.

"I think we are running the risk of talking things down too much in Australia," said Graeme Browning, Oceania managing partner, transaction advisory services. "Australians have been unnecessarily cautious and pessimistic. We are more cautious than we need to be and we run the risk of missing opportunities as a result."

According to the financial and legal advisory league tables released last week, the Asia-Pacific M&A market was the only region to show an increase in market activity for Q3 2011.

According to Bloomberg, the Asia-Pacific region had a 4 per cent increase in M&A activity as compared to July to September 12 months ago. This was in stark contrast to Europe, the Middle East and Africa, which experienced a 30 per cent reduction in M&A activity.

Browning believes the continuing resources boom and core fundamentals in the Australian economy, such as relatively low rates of unemployment and inflation, mean the Australian economy is not as exposed to global shocks in Europe and North America.

"In our part of the world, most of our companies are expecting the economy to grow," he told Lawyers Weekly. "While we are not immune to overseas factors, with unemployment being so low, our companies so well capitalised and our government not having the same debt issues that other parts of the world have, there are some good reasons to be cautiously optimistic."

The EY survey revealed that the rest of the world views the Asia-Pacific region as providing the best opportunities for further growth.

Just under half of all respondents (49%) rated the Asia-Pacific as the most fertile area for investment - well ahead of the next best performing area, North America (18%).

Just under one third (30 per cent) of Australasian respondents said they were focused on preserving capital, and that investor confidence of deal financing through equity issues has more than halved since April.

* See Lawyers Weekly magazine on Friday for where the law firms rank in the league tables