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Confidence in Global Economy Up After Two Year Hiatus |
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According to the latest McKinsey Global Survey of Business Executives, executive confidence in the global economy has risen for the first time in two years, propelled by a significant rebound in the confidence of US executives in their country's economy. |
In addition, although the economies of China and India are booming, executives in those countries display markedly different levels of confidence.
US executives shook off their earlier pessimism as US fuel prices declined, consumers became more optimistic, and the dollar's value rose. Their expectations for the six months ahead are on a par with those of their counterparts elsewhere. Executives around the world are more confident than not, though global confidence remains markedly lower than it was when first measured in January 2004.
India's executives are far more confident than their peers in China, by 18 percentage points overall, though Asian executives are more confident about the current economic conditions of their countries than about those of their own industries. Executives in China were fairly hopeful about economic conditions six months ago, but confidence has fallen by nine percentage points. Chinese executives are now neutral about the state of their industries.
The hiring plans of China's executives tend toward the extremes. On the positive side, 62 percent say their companies plan to hire in the next six months, versus 39 percent globally. Further, Chinese executives who plan to increase the workforce expect to add jobs far more aggressively than do executives in other regions. At the opposite extreme, the Chinese executives who expect the workforce of their companies to shrink, anticipate more dramatic layoffs than other executives who expect job cuts.
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