Grant Thornton Global Business Survey Finds Falling Confidence Entering New Year

Global uncertainty weighs on resurgent business confidence

LONDON--()--A Grant Thornton quarterly survey of 35 economies finds the confidence of business leaders, especially in the world's largest three economies, has slipped entering 2015.

Global business optimism for 2014 stood at an average of 41% compared to 28% in 2013 and just 12% in 2012. But in Q4, global optimism dropped from 43% to 35%, driven by steep falls in the United states (down 10 percentage points to 59%), China (down 30pp to 25%) and Japan (down 12pp to -12%).

This uncertainty is weighing heavily on business growth prospects. Both revenue growth (down 13pp from 56% to 43%) and profit growth (down 11pp from 43% to 32%) have both fallen globally. In both China (37%) and the US (35%), revenue growth expectations dropped 33pp over the quarter. Profit growth expectations in China (down 33pp to 13%) and the US (down 23pp to 34%) have seen similar falls. That said, European businesses are actually feeling more positive about growth compared with three months previously with profitability expectations up from 32% to 40%.

Highlights:

  • Business Optimism – Global optimism down from 43 to 35. Most optimistic countries: India 98, Ireland 82, New Zealand 82, Australia 70, UK 68.
  • Revenue growth – Global down from 56 to 43. Strongest revenue growth: Botswana 96, India 94, Turkey 84, Australia 72, South Africa 71.
  • Increase in Selling Prices – Global down from 28 to 23. Highest product price increases: Botswana 90, Argentina 80, India 79, South Africa 60, Australia 57.
  • Exports – Global down from 22 to 18. Top five: Turkey 64, Germany 41, India 41, Italy 38, Netherlands 38.
  • Increase in hiring – Global down from 34 to 28. Top five: India 73, Botswana 68, Ireland 54, Turkey 46, United Kingdom 44.
  • Increase in Profitability – Global down from 43 to 32. Top five: Botswana 92, India 89, Ireland 68, United Kingdom 64, Germany 61
  • R&D investments -- Global up from 25 to 30. Top five: Botswana 74, Turkey 50, Georgia 42, Germany 42, Greece 40.
  • Wage increases above inflation – Global down from 14 to 13. Top five: Sweden 56, India 39, Turkey 34, Lithuania 30, Mexico 26.

Contacts

Grant Thornton
John Vita, 312-602-8955
John.vita@gti.gt.com

Contacts

Grant Thornton
John Vita, 312-602-8955
John.vita@gti.gt.com