Business Barometer May 2013

Global business leaders are increasingly optimistic that economic conditions will improve over the coming months, according to the FT/Economist Global Business Barometer.

In the latest results, 41 per cent of the executives surveyed said they thought the global economy would get “better” or “much better” over the next six months, with 45 per cent saying they expected it to remain the same.

This is a big jump from three months earlier, when only 27 per cent expected the global economy to improve, and 48 per cent expected it to say the same.

However, the results should be read with a degree of caution, as this quarterly edition of the survey gave the respondents additional positive options (“much better” and “better”) rather than simply the “better” of previous surveys.

Out of more than 1,800 business people polled, 53 per cent said their companies were looking to expand significantly in two to five countries over the next six months.

The confidence comes despite a run of mixed economic news and the decision by the OECD grouping of mainly wealthy countries this week to knock nearly half a percentage off its global growth forecasts. The OECD move follows concerns about a slowdown in emerging markets, brinkmanship over the US debt ceiling and amid expectations for the US Federal Reserve to start scaling back its monetary stimulus.

Among those surveyed, some were sceptical that global trade deals would make any difference to their businesses, with only 34 per cent saying their company would benefit from either a US-EU trade deal or a Trans-Pacific Partnership, both of which are mid-negotiation.

There is also little sign that monetary stimulus is resulting in increased credit to business, with 66 per cent rejecting the impression that it is getting easier to borrow money from banks.

Economic and market risks rank as executives’ top concerns, with 65 per cent of respondents citing them as their biggest worries – rising to 75 per cent for businesses with more than $10bn in annual turnover.

Other commonly cited concerns include political risk, and talent and skills shortages. Despite the belief that bank loans are hard to come by, only 19 per cent said the availability of finance was a big concern.

The FT/Economist Global Business Barometer tracks changes in business sentiment over time, along with variations in the opinions held by executives working in different regions and sectors. The barometer is based on a global survey of more than 1,500 business executives carried out four times a year by the Economist Intelligence Unit for the Financial Times and The Economist.

The survey was conducted between October 15 and November 18

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