According to Ernst & Young twice-annual Capital Confidence Barometer, a majority of U.S. executives are confident that U.S. economic indicators will continue upward, with 63% expecting corporate earnings to improve and 58% indicating a positive stock market outlook.

Over the next 12 months, 42% of surveyed U.S. executives plan to pursue a deal – a return to normalized levels from record high deal intentions over the last two years. In the eight-year history of the EY Capital Confidence Barometer, U.S. deal intentions have averaged 52% and ranged as high as 79% and as low as 23%. Large-company M&A is expected to persist: Companies with greater than $5 billion in revenue are registering an acquisition appetite of 74%, in line with recent barometers.

“After the deal-making boom of the last two to three years, we find executives turning their attention to maximizing the value of recent transactions, while also weighing the uncertainty in Washington on tax reform and deregulation,” said Bill Casey, EY Americas vice chair, Transaction Advisory Services.

“We do not necessarily see this as a long-term shift in deal-making but rather a potential tactical pause. The M&A market remains full of opportunity, driven by coveted companies weighing profitable exits in light of historically strong valuations. The most nimble dealmakers will move quickly on strategic opportunities that help them grow or protect market share in this highly competitive business landscape.”

Companies are also engaging in more frequent portfolio reviews to best position themselves for investments in new technologies. Forty-nine percent of surveyed U.S. executives said they are reviewing their portfolios annually, while another 50% are doing so more frequently. Additionally, as more companies digest previously executed deals, narrative and early integration have become more central to the deal process; 41% of U.S. executives said ensuring they have a strong narrative to engage all stakeholders is key.