Global executives express severe pessimism
As the covid-19 pandemic sweeps the globe, companies are decidedly more pessimistic about the global economy than their own prospects, according to a new study released by the Economist Intelligence Unit today. The Global Business Barometer, supported by SAS, is based on a survey of over 2,700 executives worldwide and provides a compelling snapshot of corporate sentiment in the midst of the worst public health crisis in a century.
Optimism in short supply: Very few executives reported optimistic outlooks for the global economy over the next three months, resulting in a barometer reading of -39.2 (-50.0 being the most dire possible). Some regions were more pessimistic than others, with Europe (-40.4) and Asia-Pacific (-40.4) at the far end, although executives in Asia-Pacific were least pessimistic (-31.8) about their own country’s economy than the four other regions.
Cognitive dissonance: Executives are more optimistic about the state of their own organisations than the global economy. The global reading for the three-month outlook for “your industry” was -22.0 and -17.8 for “your company”, suggesting that executives either feel they have more control at these levels–as opposed to the macro-economy–or that they believe their organisations may still see some success despite the global economic impact of covid-19.
Meaner and leaner: Global executives have shown greater positivity than expected around revenue and profitability. However, except for retail and e-commerce, the 13 other industries covered by the barometer do expect declines, led by travel and tourism (-11.3 on revenue growth) and entertainment and media (-10.9 on profitability). The two key business continuity strategies that global executives seem to be adopting are taking market share (+2.1) and improving operational agility (+7.0).
The road ahead: Most executives surveyed (46%) believe that it will take between 1-2 years from the outbreak for their businesses to recover, while others (40%) believe that they will be able to bounce back in “less than a year”. Only 10% believe it will take 3-5 years.
The executive summary, highlights video, and podcasts are available at globalbusinessbarometer.economist.com
About the research
The Global Business Barometer gauges sentiment towards current events and financial market uncertainty and explores how businesses are coping today and planning for the future. The survey was fielded online among 2,758 executives from 118 countries around the world between March 26th and April 6th 2020. Sixty-four percent of the executives are based in western markets, 36% from emerging/newly industrialised countries. The study represents both MNCs (46%) and non-MNCs (54%). C-Suite members comprise 43% of the survey panel. More analysis can be found on globalbusinessbarometer.economist.com.
