Tuesday, July 20, 2004

Global Confidence Remains Positive

The outlook for the global economy remains positive according to a McKinsey survey released this month of 5,500 senior corporate leaders from around the world. However, participants were less exuberant in their enthusiasm than they had been in January.

 

The highest levels of confidence were to be found in India and China. Sixty-nine percent of their respondents expect conditions to be either substantially or moderately better in the next six months. These robust assessments were down a small amount from January. But the confidence of executives in emerging markets other than these two giants fell three times as much as that of executives in more established economies to a level of 56% positive.

 

Confidence in the near term is weakest among executives in the developed Asia-Pacific economies (Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea, and Taiwan) reports McKinsey. There, 54% forecast better times ahead.

 

In the North American Market (Bermuda, Canada, and the United States the rate of positive response was 59%.

 

What do the survey results tell us about day to day expectations? Prices are likely to remain stable. Seventy-four percent of respondents indicated that they either did not  plan to increase prices or that price cuts were on the horizon. Hiring is likely to increase. Forty-three percent said their companies would start recruiting. Small business executives were by far the most confident about adding to their payrolls. 



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