The Economist Intelligence Unit: Global executives express severe pessimism amidst covid-19 pandemic

As society-wide lockdowns ensue, the Economist Intelligence Unit reveals private-sector sentiment through its Global Business Barometer.

 

• Sentiment
  about the global economy over the next three months registered at -39.2 on a
  scale of -50 (much worse) to +50 (much better).
• Executives
  tend to be less pessimistic about prospects for their own industry (-22.0) and
  company (-17.8) over the same period.
• No industry will be spared from the
  impact of covid-19 but nearly all respondents do not see revenue or profitability
  cratering.

SINGAPORE – Media OutReach – 24 April 2020
– As the covid-19 pandemic sweeps the globe, companies are decidedly more
pessimistic about the global economy than their own prospects, according to a
new study released by the Economist Intelligence Unit today. The Global Business Barometer, supported by SAS, is based on a
survey of over 2,700 executives worldwide and provides a compelling snapshot of
corporate sentiment in the midst of the worst public health crisis in a
century.

Optimism in short supply: Very few executives reported optimistic outlooks for the
global economy over the next three months, resulting in a barometer reading of
-39.2 (-50.0 being the most dire possible). Some regions were more pessimistic
than others, with Europe (-40.4) and
Asia-Pacific (-40.4) at the far end,
although executives in Asia-Pacific
were least pessimistic (-31.8) about
their own country’s economy than the four other regions.

Cognitive dissonance: Executives are more optimistic about the state of their own
organisations than the global economy. The global reading for the three-month
outlook for “your industry” was -22.0
and -17.8 for “your company”, suggesting that executives either feel they
have more control at these levels–as opposed to the macro-economy–or that they
believe their organisations may still see some success despite the global
economic impact of covid-19.

Meaner and leaner: Global executives have shown greater positivity than expected around
revenue and profitability. However, except for retail and e-commerce, the 13
other industries covered by the barometer do expect declines, led by travel and tourism (-11.3 on revenue
growth) and entertainment and media
(-10.9 on profitability). The two key business continuity strategies that
global executives seem to be adopting are taking
market share (+2.1) and improving
operational agility (+7.0).

The road ahead: Most executives surveyed (46%) believe that it will take between 1-2 years
from the outbreak for their businesses to recover, while others (40%) believe
that they will be able to bounce back in “less than a year”. Only 10% believe
it will take 3-5 years.

The
executive summary, highlights video, and podcasts are available at
globalbusinessbarometer.economist.com

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. The survey was
fielded online among 2,758 executives from 118 countries around the world
between March 26th and April 6th 2020. Sixty-four percent of the executives are
based in western markets, 36% from emerging/newly industrialised countries. The
study represents both MNCs (46%) and non-MNCs (54%). C-Suite members comprise
43% of the survey panel. More analysis can be found on globalbusinessbarometer.economist.com.

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 eiuperspectives.economist.com. Follow us on Twitter, LinkedIn and Facebook.

About SAS

SAS is
the leader in analytics. Through innovative software and services, SAS empowers
and inspires customers around the world to transform data into intelligence.
SAS gives you THE POWER TO KNOW®.