Things are bad, but not as bad – business leaders are developing a more optimistic outlook, but with second wave concerns that may quickly shift
There was a more optimistic outlook among business leaders in the latest third edition of The Economist Intelligence Unit’s Global Business Barometer (GBB), based on a survey fielded in June and which tracked improvements in sentiment as global executives started thinking about recovery.
The latest results show sentiment is improving once again but remaining firmly in the negative, that is with the exception of China which in this edition records the first positive barometer reading. The three-month outlook for the Chinese economy among China-based executives tipped into “somewhat better” in June, though only just at +2.0. This is in stark contrast to the previous edition when the outlook there soured by -21.9, by far the most among the twelve main economies surveyed in the report.
On a global level, the three-month outlook for the economy among all survey respondents scored -16.8 (the barometer ranges from -50 to +50), moving the needle into the “somewhat worse” category after being in the “much worse” category in the first two editions with a score of -27.7 in the previous edition.
Latin America leads the way, registering an 18.5 point increase – nearly four points higher than the next region, Asia Pacific, which increased by 14.8 points. The two regions were also among the biggest gainers across the five other main areas of the barometer. Executives in Europe are generally much more optimistic about the economic outlook than in the previous edition, with their scores improving by 11.5 points from -30.6 to -19.1 over the month.
Sentiment about the global economy in North America barely budged, moving up just 1.5 points (from -26.0 in May to -24.5 in June). The readings were slightly more encouraging on the regional and country-level economic outlooks compared with May, but North America is nevertheless the most pessimistic region in both these areas, unsurprising given the recent spikes in Covid-19 cases at this time.