The U.S. ranked as the sixth most optimistic economy in the world among business leaders despite some recent declines, according to a new survey by Grant Thornton.
The Grant Thornton International Business Report surveyed more than 2,500 business leaders in 34 countries and found that optimism for the nation’s economic outlook among U.S. business leaders remained strong at a net balance of 59 percent in the fourth quarter of 2014. However, that represented a decline from net 69 percent in the third quarter. Revenue expectations in the U.S. also dropped 33 percentage points to net 35 percent in the fourth quarter.
The decrease in optimism in the U.S. still reflects a 23 percentage-point increase from one year ago. In the fourth quarter of 2014, global optimism dropped from net 43 percent to 35 percent. The other most optimistic economies include India, Ireland, New Zealand, Australia and the United Kingdom.
An earlier survey, the Grant Thornton LLP 2014 Fall CFO Survey, found that nearly half of CFOs (47 percent) expect the U.S. economy to improve during the next six months and only 9 percent anticipate it will worsen. The biannual survey reflects the insights of more than 1,000 CFOs and other senior financial executives across the United States.
“Business confidence in 2014 climbed to levels not seen since before the financial crisis, and executives remained largely positive about their expansion prospects,” said Grant Thornton LLP senior vice chair Stephen Chipman in a statement. “However, the prevailing uncertainty is forcing businesses to delay decisions about investment in the future growth of their operations. The dip in optimism in the past three months suggests that businesses around the globe could see volatility on the horizon in the new year.”
U.S. companies’ plans to invest in research and development have continuously increased during the past two years to net 37 percent, up 10 percentage points from the previous quarter. This also reflects a 26 percentage-point increase from fourth quarter 2012.
Companies’ plans to invest in new buildings in the next 12 months increased to net 39 percent, up 14 percentage points from last quarter, while plans to invest in plants and machinery increased 5 percentage points to net 37 percent.
In the fourth quarter of 2014, nearly half (net 43 percent) of manufacturing leaders expect their industry’s revenue to climb in the next year. A net balance of 23 percent of manufacturing leaders predict an increase in hiring in the coming year, while 62 percent expect to offer employees a pay raise in the next 12 months.
Globally optimism dropped from net 43 percent to 35 percent among the business leaders polled by Grant Thornton. Also globally, revenue expectations fell from net 56 percent to 43 percent, and profitability expectations declined 11 percentage points to net 32 percent.
In China (net 37 percent) and the U.S. (net 35 percent), revenue expectations dropped 33 percentage points from the previous quarter. Profitability expectations in China, which decreased 33 percentage points to net 13 percent, and in the U.S., which fell 23 percentage points to net 34 percent, have seen similar declines.
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