Global business confidence at 12-month high; improving confidence in North America and China driving global uplift in sentiment; upcoming U.S. Presidential elections add to uncertainty over global trade.
Business confidence in the U.S. improved for the third quarter in a row and is now at its highest level since Q2 of last year. The recent improvement in confidence coupled with strong employment growth and high core price pressures are all reasons to think that the Fed will resume its tightening cycle sooner rather than later. The report notes that the investment opportunities index fell to its lowest level since the final quarter of 2012, possibly indicating that uncertainty over the outcome of November’s presidential election is causing companies to put big plans on hold.
Meanwhile, fears that headwinds from the U.K. vote to leave the EU in June could spread to the global economy have not been realized, with confidence among U.K. businesses holding up relative to the previous quarter – although it is still low, with respondents reporting a decrease in confidence outnumbering those reporting an increase. With protectionist sentiments on the rise across many nations, the November presidential election could have a significant impact on whether this improving confidence translates into genuine increases in employment and investment.
Faye Chua, head of business insights at ACCA, says the survey highlights the importance of governments supporting growth and their increasing realization of the limits of monetary policy.
“Over 51% of respondents expected government spending to rise, which has driven global business confidence to the highest point in over a year,” Chua said. “After years of reduced investments in most Western economies, a combination of falling budget deficits and bond yields is encouraging governments to reach for their wallets. This is good news for business in a continued depressed climate for investment and hiring.”
Full press release
© ACCA - Association of Chartered Certified Accountants
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article