Global Business Confidence Slides in Second Quarter
Confidence among businesses around the world declined last month as the ongoing sovereign debt crisis in Europe renewed concerns about a possible double dip recession. According to a survey conducted by financial data tracker Markit, the number of businesses surveyed who expect business activity to pick up over the next twelve months outnumbered the number expecting a decline by 37 percent, down from 44 percent in February, the last time Markit conducted the survey.
To conduct the survey, Markit polls some 11,000 businesses around the globe, mostly representatives of the manufacturing and service sectors. The firm noted that even with the decline, the results are promising, indicating that most businesses still expect economic expansion, even with a series of negative indicators that have surfaced in the last few months. Also, the margin between optimists and pessimists is still ahead of the post-recession low from October, when the glass-half-full crowd exceeded the negative outlooks by just 32 percent.
Markit’s survey also showed that businesses are scaling back hiring plans, with 17 percent more companies expecting to accelerate hiring, down from a difference of 19 percent in February. Optimism has particularly tailed off in Europe, where just 16 percent more expect growth than contraction, down slightly from a 26 percent gap in February. American businesses are still much more confident, as 57 percent more expect growth than contraction, though that number is also down from February’s reading gap of 69 percent.