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The Financial Times and The Economist today publish the latest Global Business Barometer survey, which reveals more than half of business leaders believe the global economy will get worse in the next six months.
The Global Business Barometer conducted by the Economist Intelligence Unit, surveyed over 1,600 business executives from around the world between October 10 and October 21 with the aim of gauging changes in business sentiment.
Results show that 53 per cent of executives expect the global economy will deteriorate, up from 34 per cent in the last quarter, while less than 15 per cent believe things will improve. The survey shows how the mood of the business community has darkened over the last six months.
The dire state of the eurozone has contributed to a collapse in confidence in the global economy, with 45 per cent of business leaders altering their investment decisions because of the crisis – creating a prevailing mood of pessimism in Europe and many emerging markets.
This pessimism varies from region to region. At 60 per cent, executives in western Europe prove to be the most disheartened. In Asia the percentage of executives expecting the economy to worsen rose from 36 per cent to 54 per cent and in Latin America from 41 per cent to 57 per cent.
Daniel Franklin, executive editor at The Economist, said: “For the second quarter in a row, global business sentiment has plunged. It is now deep into negative territory. This is especially worrying at a time when economic recovery will depend on businesses having the confidence to invest.”
Hardly anyone expects the global economy to tip back into recession next year: just 2.5 per cent of respondents predicted growth would shrink in 2012. The majority expected fairly sluggish growth of between 2.5 and 5 per cent.
John Thornhill, news editor at the Financial Times, said: “At a time when the future of the eurozone looks increasingly uncertain it is more important than ever to monitor change in the business outlook across the globe. The latest FT/Economist Business Barometer survey demonstrates dwindling confidence among business leaders not just in Europe but also in emerging markets”.
The barometer with interactive graphics can be found at: www.ft.com/ftbarometer
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