McKinsey Global Survey results: Executives' optimism about the economy continues to climb, but they're a little less sure about their own companies' prospects.
For the first time in a year, a majority of respondents--51%--say economic conditions in their countries are better now than they were in September 2008, according to a survey in the field during the last week of October, a volatile week for stock markets.A larger share of executives also expects the good news to continue, with 47% expecting GDP growth to return to pre-September 2008 levels in 2010 or 2011, compared with 40% six weeks ago. Although the global news is good, there are marked regional differences; executives in the developed countries of Asia are generally the most optimistic and those in Europe are the least.
However, a majority of executives around the world share the prevailing skepticism about consumers: When asked to name the biggest threat to future economic growth and to the growth of their own companies, more cite low consumer demand than anything else. Ineffective government regulation is the next biggest economic concern, respondents indicate, followed by losing business to low-cost competitors.
Looking ahead, respondents' views on company profits and workforce size haven't changed meaningfully in the past six weeks. Pluralities still expect increased profits in 2009 and no change in their workforces through the first quarter of 2010. Here, too, however, there are notable regional differences.
Where Economic Optimism Is Highest
Although 51% of all respondents say economic conditions are better than they were last September, only 19% say an upturn has begun. This figure rises to a remarkable 33%, however, among respondents in Asia's developed countries. And about a quarter of those--more than in any other developed region--also say the best way to describe the global economy through the end of the first quarter of 2010 is "regenerated global momentum."
Respondents identify several potential stumbling blocks to economic growth, most often low consumer demand. Other potential barriers to growth vary by whether respondents expect their nations' GDPs to increase or decrease. In countries where executives expect an increase in GDP, more are also worried about currency values and inflation; in countries where executives expect a decrease, they are notably more concerned about ineffective regulation.
