While optimism for the nation’s economic outlook among U.S. business leaders rose in second quarter 2015, optimism among Greek business leaders plummeted to its lowest level since fourth quarter 2012.
This is according to the latest data from the Grant Thornton International Business Report (IBR), a survey of more than 2,500 business leaders in 36 countries.
In second quarter 2015, optimism for the economic outlook among U.S. business leaders rose 11% to net 54%. Eurozone confidence spiked to net 54%, a significant increase from net 34% last quarter. Confidence in the European Union increased to net 58%, a 20% increase from last quarter, and well above pre-crisis highs.
Although optimism is up in the European Union, confidence among Greek business leaders dropped significantly. There, optimism plummeted to net -38%, down 44 percentage points from last quarter. Confidence in China, the world’s second largest economy, increased to net 46%, up 12% from the previous quarter. Optimism among Brazilian business leaders dropped 6% to net -24 percent, marking the fifth consecutive quarter of decreased optimism.
Globally, 45% of businesses are optimistic, up 12% from the previous quarter. The most ambitious businesses are in Germany (92%), Ireland (90%), New Zealand (86%) and India (85%).
“With optimism among U.S. business leaders on the rise, and so many other large economies reporting increased confidence, the global economy seems to be headed in the right direction,” said Stephen Chipman, senior vice chair at Grant Thornton LLP. “Less encouraging, however, is that, though business confidence seems to have recovered, business leaders around the world are still seemingly hesitant to make long-term investment decisions.”
Globally, investment expectations remain weak. In second quarter 2015, global companies’ plans to invest in research and development dropped 5% to net 26%. Companies’ plans to invest in new buildings in the next 12 months dropped slightly to net 19%, while plans to invest in plants and machinery decreased 5% to net 27%.
In the United States, companies’ plans to invest in research and development dropped 5% to net 32%, following a stagnant six-month period at net 37%. Companies’ plans to invest in new buildings in the next 12 months increased to net 26%, up just 3% fom last quarter, while plans to invest in plants and machinery decreased 4% to net 20%.
U.S. profitability expectations decreased 3% to net 65%, while revenue expectations decreased slightly to net 70%. U.S. hiring expectations remained relatively high at net 48%, down just 8% from last quarter. Pay raise expectations improved just 2% to net 10% of U.S. business leaders expecting to offer employees an above-inflation pay raise in the next 12 months.