A Surge in US covid-19 cases leaves North American Executives the most pessimistic in the world about the global economy, shows The Economist Intelligence Unit’s third Global Business Barometer
***This release was issued by The Economist Intelligence Unit on August 6, 2020***
- Overall executive sentiment about the three-month outlook for the global economy rose to -16.8 from -27.7 in May (out of a range of -50 to +50)
- 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 for outlook on their region’s economy (moving from -34.4 in May to -24.0 in June) and country-level economic outlook (moving from -32.2 in May to -25.5 in June) compared with May, but North America is nevertheless the most pessimistic region in both these areas
- Considering the surge in US cases over the past six to eight weeks, this is not a surprising result
Economic recoveries from crises such as the covid-19 pandemic come in many shapes. The hope everywhere is always that they will be V-shaped, but U shapes are the next best thing. A volatile W and the dreaded L are worst-case scenarios. The latest Global Business Barometer, based on a survey and analysis conducted by The Economist Intelligence Unit and supported by SAS, shows that as of late June the possibility of a U-shaped recovery remains possible.
Ticking closer to positive: The overall barometer reading for the global economy reached -16.8, the closest it has been to positive territory yet. Respondents in Latin America and Asia Pacific led the way, with +18.5 and +4.0 point improvements respectively. Sentiment about the global and regional economies in North America barely budged from the previous barometer, rising by +1.5 and +0.2 points, making it the most pessimistic on both accounts.
China, the first economy to turn positive: 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 still makes it the first economy to do so since the GBB began in April. The change in sentiment is in stark contrast to the previous GBB when the outlook soured by -21.9, by far the most among the twelve main economies surveyed.
The road, less travelled: Only 8.1% of respondents in the June GBB survey “strongly agree” that their country is ready to open and only 6.7% “strongly agree” that their company is ready to return to operating as it had done before the pandemic. Those figures are chilling whether you read them as recognition of the scale and scope of the problem or an indictment of global or country-level responses to covid-19 (or some combination of the two). Before barometer scores can improve, more leaders and policymakers around the world will need to demonstrate to everyone that they can be more effective in containing the virus.
About the research
The Global Business Barometer gauges sentiment towards current events and financial market uncertainty and explores how businesses are coping today and planning for the future.
About The Economist Intelligence Unit
The Economist Intelligence Unit is the thought leadership, research and analysis division of The Economist Group and the world leader in global business intelligence for executives. We uncover novel and forward-looking perspectives with access to over 650 expert analysts and editors across 200 countries worldwide. More information can be found on www.eiuperspectives.economist.com. Follow us on Twitter, LinkedIn and Facebook.
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