Grant Thornton : Fall in business optimism in mature economies

By Rob Starr, Content Manager, Big4.com

The latest data from the Grant Thornton International Business Report (IBR), a survey of 3,200 business leaders in 44 economies, suggests economic uncertainty caused by concerns over the United States ‘fiscal cliff’ and ongoing fears over the long-term viability of eurozone is dampening growth prospects. The IBR reveals that global business optimism stands at just net 4% heading into the New Year. This halts a rally in confidence seen in the first half of 2012, when global business optimism reached 23%, and brings it nearer to the 0% level observed this time last year.

“There is no question that protracted negotiations over how to resolve both the sovereign debt crisis in the eurozone and the fiscal cliff in the United States have weighed heavily on business confidence over the past six months,” says  Ed Nusbaum, CEO of Grant Thornton International.  “With the economic outlook clouded by these issues, business investment becomes a much riskier proposition for many. The hope, both in the United States and around the world, is that these issues can be resolved and that this drop in confidence is temporary rather than the start of a longer decline.”

Expectations for increasing revenues (down 10 percentage points) and profits (down 9) both fell sharply over the past three months. This chimes with research from Grant Thornton US which suggests 40% of CFOs have delayed decision making because of fiscal cliff concerns (Grant Thornton US ‘Fall 2012 CFO survey’ via http://www.grantthornton.com).