The business environment, infused with uncertainty, has muted the growth of business confidence, according to the results of the Duke University/CFO Magazine Global Business Outlook survey for the fourth quarter of 2015. “Economic uncertainty” was the top business concern cited by executives around the world, across virtually all regions.

U.S. finance executives say that their companies have entered a holding pattern, awaiting clearer direction from a business environment shaped by continued depression of oil prices, slippage in China, troubles in Brazil, and terrorism touching Europe.

The survey, which concluded on December 4, generated responses from more than 1,000 finance and corporate executives from companies of all sizes, including 500 executives from the United States and Canada, 118 from Asia (including Japan), 101 from Europe, 250 from Latin America (including Mexico), and 61 from Africa.

The outlook of U.S. finance executives for their economy remained essentially unchanged this quarter, rising to 60.3 from the previous quarter’s 60.0, on a scale from 0 to 100 (and still down from the year’s high point of 64.7 in the spring of this year). Confidence in U.S. respondents’ own companies also remained virtually unchanged. However, the 65.9 rating that U.S. executives assigned to their level of optimism for their own companies still remains close to historical lows.

Capital spending for U.S. companies is expected to remain somewhat soft, increasing modestly to 2.6% at U.S. companies. However, the earnings-growth outlook has rebounded sharply to 9.5%, and employment levels are registering a steady 2.4% growth. Attracting and retaining qualified employees was as a top concern for U.S. businesses.

Modest Movement Overseas

Despite treading water this quarter, economic optimism remains higher in the United States than in any other region of the world.

In Europe, optimism about domestic economies improved slightly this quarter, increasing from 57.9 to 58.4. Despite modest declines versus third-quarter findings, European executives’ expectations still top those of their U.S. counterparts in terms of capital spending (an anticipated 3.7% increase over the next year) and full-time employment (rising 3.6%). On the other hand, expected earnings growth for the next twelve months fell drastically for Europe, to only 0.7% versus an expected 8.1% in the third quarter. European top business concerns also include currency risk and difficulty attracting the right employees.

For the second consecutive quarter, optimism is lower in all emerging regions than in either North America or Europe. Asian confidence (excluding Japan) has taken the biggest hit, with economic optimism falling to 53.9, down from 55.6 in the third quarter survey. Full-time employment will increase by a modest 1.0% at the same time that a 7.2% hike in wages is foreseen. Top business concerns across Asia also include weak demand for products/services and currency risk.

In the fourth quarter Japan’s economic optimism reversed a prior negative trend, rising from 55.9 to 58.1. In addition, the full-time employment outlook improved from negative to flat.

Latin American economic optimism remains lowest in the world (46.3 on a 100-point scale), though it is a region of contrasts. Optimism in Brazil (41.7) remains low, while in contrast optimism is strong in Mexico (64.3). Full-time employment and capital spending will both fall by more than 5% in Brazil, while both will increase by at least 2% in Mexico. The strong U.S. dollar is having a net positive effect in Mexico. Top concerns across Latin America also include government policy and weak demand for products/services.

African optimism increased slightly this quarter (from 48.2 to 49.3). Employment is expected to increase by 3.2% and wages by 7.1% in 2016. Capital spending will rise by a median 5%. More than half of African firms indicate that their asset stock is aging, implying that more investment in new assets is required. African CFOs are also worried about currency risk and government policies and regulations.

Aging Assets and Productivity

Sparse spending on new assets will lead to an aging of the stock of assets in place. Fifty-four percent of U.S. firms say their assets are aging at a moderate or faster rate. Forty percent of these companies say aging assets reduce their overall productivity.

Other factors have also dampened productivity growth. Nearly 60% of U.S. firms say that regulation has negatively affected productivity, and nearly half say that weak economic conditions have hurt.

Other factors are having a counter-balancing effect on productivity, however. More than 80% of CFOs say that automation and technology have made their operations more productive, and nearly 80% also say process changes have improved efficiency.

Refugees in Europe

European executives have a mixed reaction to the recent refugee crisis. Nearly 60% say that the influx of refugees will help solve the looming demographic problems their nations face, and 55% believe the overall economic impact will be positive.

At the same time, European executives recognize the costs and challenges presented by the influx of refugees. Eighty-one percent say that they think European leaders have mismanaged the crisis, and a majority (55%) believe refugees will increase competition for jobs and drive down wages. Nearly 40% say their own firms would be willing to hire refugees to help with the crisis – but almost 30% say that their firms would not.Slide1

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