The 2nd Edition of the Global Business Barometer Improves but Executives Still See the Economy and Their Businesses in the Survival Phase

The Economist Intelligence Unit (EIU)

2020/6/30 16:05

PR84566

 

LONDON, June 30, 2020 /PRNewswire=KYODO JBN/--

 

- Executive sentiment about the three-month outlook for the global economy rose

but remains pessimistic at -27.7 (out of a range of -50 to +50)

 

- The single biggest swing in the barometer came in China, where executives'

outlook for the domestic economy declined by 21.9 points

 

- The most popular government action to help the economy and business recover,

receiving 51% of responses, was to limit international travel

 

There are three broad stages to recovery from the kind of crisis we are

experiencing now: survival, adaptation and recovery. The latest Global Business

Barometer, conducted by The Economist Intelligence Unit and supported by SAS,

shows that as of late May executives believe we are still in the survival

phase, although many have made adaptations to their operations, some of which

may become permanent.

 

Less pessimistic: The barometer reading for the 3-month outlook for the global

economy rose 11.7 points from -39.4 to -27.7, a marked improvement from the

first GBB in April but indicative of a recovery that could remain a long way

off. Sentiment in Europe increased the most (from -40.5 to -27.3), followed

closely by the Asia-Pacific and North America. Sentiment about the global

economy among executives in the Middle East and Africa region, while still up,

increased by only 6.9 points, the least among the five regions covered by the

barometer.

 

Sentiment in China falls: The biggest single swing in the barometer from April

to May came in China, where the 3-month outlook for the economy fell by 21.9

points. At the time of the first GBB in April, China looked to be over the

worst of COVID-19 (or at least the worst of the first wave). That has clearly

since changed, with the mood souring considerably on widespread downgrades to

China forecasts and the Chinese government abandoning its annual GDP target for

the first time in decades.

 

The road, less traveled: When asked what actions they would like to see

governments take in the coming months to get the global economy and businesses

back on track, "limit international travel" surged to the number one answer

(51%) after ranking towards the bottom in our last GBB survey. This put it

ahead of other options such as direct fiscal stimulus to consumers and tax

cuts. Now that travel restrictions have been demonstrably effective in many

instances against the spread, we see a mix of resignation and adaptation

amongst executives on the issue.

 

Coming to grips: There was an uptick in the percentage of GBB survey

respondents answering that the global economic recovery will take "3 to 5

years." In April, the figure stood at 30.8%. In May it was at 37.2%. All other

options more or less held steady.

 

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.

 

About The Economist Intelligence Unit

 

The Economist Intelligence Unit is the thought leadership, research and

analysis division of The Economist Group and the world leader in global

business intelligence for executives. We uncover novel and forward-looking

perspectives with access to over 650 expert analysts and editors across 200

countries worldwide. More information can be found on

www.eiuperspectives.economist.com.

 

Follow us on Twitter [https://twitter.com/TheEIU ],

LinkedIn [https://www.linkedin.com/company/the-economist-intelligence-unit/ ],

and Facebook [https://www.facebook.com/TheEIU ].

 

About SAS

 

SAS [http://www.sas.com/recover ] is the leader in analytics. Through innovative

software and services, SAS empowers and inspires customers around the world to

transform data into intelligence. SAS gives you THE POWER TO KNOW(R).

 

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Source: The Economist Intelligence Unit (EIU)

 

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