Alan Buckle:
Within our latest Global Business Outlook survey, the global net balance for business activity optimism again stands at around +50 for manufacturing and +44 for services. Seeing these healthy numbers for a second consecutive survey, I believe that sustained economic recovery is now on the cards and that companies are looking to restart investment in employment and capital expenditure.
Within the survey results, I think that you can perceive confidence slowly taking root in certain countries in the West and of companies being prepared to put their cash reserves to good use, taking the baton from governments who are keen to unwind stimulus packages.
Interestingly, businesses in the BRIC economies are still some way ahead of the rest of the world in terms of confidence but we’re actually seeing that their optimism is starting to dip a touch. Typically, this is happening as they come to terms with prudent government action aimed at reining in their super-charged economies and reducing fears around inflation.
Persistent, nagging fears about a double dip recession refuse to disappear altogether but I believe that our latest survey indicators nevertheless provide some comfort that recent reports of weakening activity will prove temporary.
On a more cautionary note though, while confidence in Europe is strong in manufacturing - helped by global demand and, in some cases, falling currency - confidence in the service sectors is weakening and this could be a significant drag on countries such as Spain and the UK which have a small manufacturing base.