Despite the protracted crisis in Europe and emerging concerns from China, two independent surveys commissioned by Grant Thornton revealed that executives have growing confidence in the US economy.
First, the International Business Report is a survey of 2,800 global businesses. Among its findings: Those optimistic about the US economy increased from 26% to 36% since the last survey three months earlier (global optimism rose from 34% to 36%). Those expecting to increase hiring rose from 26% to 41% (globally the number increased from 33% to 37%), and those planning to increase employee wages above inflation increased from 5% to 11%, but remain below the global average (14%).
US inflation appears to remain in check, as those planning to increase the price of their goods increased only from 35% to 38% over the last three months (globally, the figure was unchanged at 35%). There was also good news for US manufacturing as investments in plants and machinery increased from 28% to 43% (globally the number increased from 37% to 40%).
Second, the Business Optimism Index was conducted in November/December 2011 with 379 senior executives from various industries across the country responding. Its findings show that 33% of respondents believe the US economy will improve in the next six months, compared with just 18% back in August. The Index itself rose 11.8 points to 57.9, reflecting growing confidence in key economic measures: the US economy, business growth and hiring expectations.
Some of the IBR survey’s global highlights:
Country economic optimism
Canada optimism dropped from 69% of respondents down to 59%; France optimism dropped from 31% to 11%; and Hong Kong optimism dropped from 42% to 26%. Mainland China optimism increased from 30% to 39%; and India optimism increased from 69% to 75%. The six most optimistic major economies were: Brazil 78%, India 73%, Mexico 64%, Germany 62%, Australia 51% and Canada 49%.
The highest price increases in major economies: India 66% said they would increase prices (up from 52%); Brazil 50% (up from 48%); Germany 45% (up from 39%); Mainland China 41% (down from 53%); Hong Kong 38% (down from 44%); and Canada 38% (down from 45%). The highest decrease in major economies was Japan – 41% said they would decrease prices (up from 34%), with only 7% planning to increase prices.
The biggest increase in planned hiring in major economies was the US, from 26% of respondents saying they plan to hire to 41%; the UK 25% to 29%; and Japan 33% to 39%. The highest overall planned increase in major economies was India at 66% (slightly down from 69%), followed by Mainland China at 45% (unchanged). The biggest job slowdown was Spain, where 28% will cut workforce numbers (while 12% will increase); and France, where 15% will cut workforce and 12% will hire.