Latest McKinsey Global Survey of Executives Shows Cautious Optimism

02.26.2010

Economic conditions are much improved for both companies and countries, executives say-but hopes for continued recovery are a little less bright than they were in December.

Three-quarters of respondents to our latest survey expect their companies to enjoy a profit increase in the next year, and fewer than half expect to cut costs during the same period-both firsts since October 2008, when we began asking. On the whole, this survey shows that executives see economies on the mend, with positive prospects for their countries-84 percent expect national GDP to rise in 2010-as well as for their companies.

But the results also show uncertainty and uneasiness about the future, particularly at the global level. When asked about the likeliest description of the global economy over the next three months, 46 percent of executives pick "constrained global markets perpetuate imbalances"-far more than choose any other description. This view, along with a dip in the share of respondents who expect their national economies to be better in six months, implies a slight dampening of economic hopes since December. Low consumer demand is seen as the largest single threat to national economic recovery in developed economies.

Respondents in developing economies, however, see a bright picture for both their companies and national economies. Further, they identify very different threats to growth: most notably, high commodity prices and currency values.

The online survey was in the field from February 9, 2010, to February 12, 2010-a week of volatile stock markets globally and particular economic uncertainty in the eurozone. It garnered 1,467 responses from executives representing the full range of industries, regions, functional specialties, and tenures.

See the full report by clicking here