Since 2003, Doremus and the Financial Times have partnered to check the pulse of senior executives around the world on their outlook for the business environment.
This year, there were 628 respondents to the annual Decision Dynamics survey, representing a mix of company sizes and industries from North America, Europe and Asia.
Levels of optimism plummeted again this year. Respondents were only slightly more optimistic about the global and local economics than they were in 2008, and maintained the same level of optimism regarding their industries and companies.
Six out of ten respondents to this year’s survey expect further decline in the global economy over the next six months. And nearly half of them do not believe the economy will recover until or after 2013.
When asked: “In the next six months, what changes do you expect in…global economic conditions, your local economic conditions, your industry’s economic conditions, and your company’s results?” responses varied, as shown in the following chart.
Outlook: % Expecting Improvement
Spending: Cautiously optimistic.
The survey shows that more companies are increasing rather than decreasing their spending in most categories, albeit by smaller margins than they were in 2010…yet much more than in 2009.
Only a quarter of the companies in the survey plan to hire this year while the same proportion expect their organization’s employment level to decrease. This is somewhat worse than the 2010 findings and very similar to the results from 2009.
Impact of Key Global Events
Low consumer confidence and U.S. and European debt issues will continue to impact more companies over the next six months or longer.
Companies that operate globally are most likely to feel the fallout from some of the year’s global issues, namely: the European debt crisis, U.S. debt/budget, Arab Spring, and Japan disasters. There are also geographic differences, with Asian respondents this year feeling the impact of European and U.S. economic issues.
Hope Picker, Doremus Director of Strategic Research, said, “As we see companies increase their spending, even at miniscule increments, we expect there will be a steady snail’s pace back to recovery. Barring any further disasters, natural or otherwise, this show of modest spending is a sign of life – and gratefully not life support.”
Daniel Rothman, Director of Research in the Americas for the Financial Times, said, “Global business leaders have felt the repercussions of the European and U.S. debt crises, as well as global unemployment, battered consumer confidence, and a year filled with natural disasters. As we enter 2012, the only sure fact for many companies is that visibility remains poor.”
For more information about the current Decision Dynamics global survey, contact Hope Picker.