The global economy in 2017, looking beyond uncertainty

Businesses look beyond uncertainty as global optimism rises

Our findings from the latest International Business Report show business leaders around the world, for the most part, enter 2017 in a positive frame of mind. This sunny outlook is particularly visible among businesses in the world’s major economic blocs, including the United States and China.

Globally, business optimism stood at 38% at the end of 2016, representing a 5 percentage point jump from the previous quarter. Also, globally the proportion of firms expecting revenue to increase in 2017 has climbed to its highest figure in nearly two years.

The IBR draws on more than 10,000 interviews with business leaders and international economic forecast data, this latest report explores the growth drivers and constraints facing dynamic businesses over the next 12 months including economic uncertainty, export growth, and business propensity to reinvest among other indicators.

• Globally, business optimism at the end of Q4 2016 stands at net 38%. This is an increase of 5pp from Q3 and the highest level since Q3 2015. In the US, optimism has increased from 43% to 54% - and the trend is repeated globally.
• Business optimism has recovered to 34% in the EU, a 6pp increase from the previous quarter, and has jumped even more significantly in the Eurozone, up 10pp to 37%.
• Strong fundamentals underpin the rise in optimism. Globally, the proportion of firms expecting revenue to increase in 2017 has gone up by 5pp to net 50% - the highest figure in nearly two years.
• Business optimism in Mexico has fallen to 8% in Q4 – the lowest quarterly figure recorded. Business leaders in the developed APAC economies (down from -8% to -16%) are also more pessimistic.