Europe and APAC were most pessimistic about the global economy, although APAC was least pessimistic about its regional local economic conditions.
A survey of over 2,700 executives worldwide for their sentiments about the current pandemic’s economic impact has provided a compelling snapshot of corporate sentiment in the midst of the worst public health crisis in a century.
Companies are decidedly more pessimistic about the global economy than their own prospects, according to the new study called the Global Business Baromater, released by the Economist Intelligence Unit today.
Optimism in short supply: Very few executives reported optimistic outlooks for the global economy over the next three months, resulting in a barometer reading of -39.2 (-50.0 being the most dire possible). Some regions were more pessimistic than others, with Europe (-40.4) and Asia-Pacific (-40.4) at the far end, although executives in Asia-Pacific were least pessimistic (-31.8) about their own country’s economy than the four other regions.
Cognitive dissonance: Executives were more optimistic about the state of their own organizations than the global economy. The global reading for the three-month outlook for “your industry” was -22.0 and -17.8 for “your company”, suggesting that executives either feel they have more control at these levels—as opposed to the macro-economy—or that they believed their organizations may still see some success despite the global economic impact of Covid-19.
Meaner and leaner: Global executives have shown greater positivity than expected around revenue and profitability. However, except for retail and e-commerce, the 13 other industries covered by the barometer do expect declines, led by travel and tourism (-11.3 on revenue growth) and entertainment and media (-10.9 on profitability). The two key business continuity strategies that global executives seem to be adopting are taking market share (+2.1) and improving operational agility (+7.0).
The road ahead
Most executives surveyed (46%) believed that it will take between one and two years from the outbreak for their businesses to recover, while others (40%) believe that they will be able to bounce back in ‘less than a year’. Only 10% believed it will take 3-5 years.