World business executives gloomy on economic outlook
June 28, 2012, 12:08 am TWN
WASHINGTON -- Business executives around the world have become much more gloomy about the global economy as the eurozone crisis pounds on, according to a new survey released Tuesday by McKinsey & Co.
Around one-half of 1,349 executives surveyed in early June said they expect the economy to worsen through the rest of the year, while only 20 percent see things getting better.
That was a full reversal from three months earlier, when 20 percent of executives told McKinsey they saw things getting worse and 48 percent said the global economy would pick up.
“These results are no doubt linked to the political and economic uncertainty in the eurozone, where 46 percent of global respondents expect to see a recession in six months,” said McKinsey.
On the other hand, it said, “respondents in the eurozone are more optimistic than average about the region's prospects: only 32 percent of executives there expect a recession.”
The reversal of hopes extended to executives' views about their own countries: most of those optimistic three months ago turned more sour, with over half saying things would be the same or worse in the next six months.
“Executives cite low consumer demand most often as a risk to economic growth in their countries,” the study said.
They are also increasingly wary of debt defaults by governments and the impact of that on global economic expansion; most think Greece will default, McKinsey said.
Yet the business chiefs mostly felt things were improving at their own companies. Just 15 percent believed demand for their companies' products and services would decline in the second half of 2012, and over half said they expected profits to grow.