“Clouds are gathering,” says Markit
We’ll have the bad news, then the good news, shall we?
The bad news
Businesses across the world are feeling less confident about their futures than they have in five years.
That’s according to the most recent Global Business Outlook Survey from Markit, which monitored more than 6,000 businesses and conducts its research three times a year.
Plans for hiring and investing are also at their lowest or near-lowest levels since 2009, when the survey began.
Why is confidence so low?
The report states that businesses worldwide are concerned about:
– another eurozone downturn
– the global economic climate potentially worsening
– the political instability in the Middle East and Ukraine
– political uncertainty in many countries
– potential increases in interest rates in the US and UK
“Clouds are gathering over the global economic outlook, presenting the darkest picture seen since the global financial crisis,” said Chris Williamson, chief economist at Markit, in a statement.
“A key factor that has held back economic growth in recent years has been the disappointing performance of major emerging market economies, and this looks set to continue, and perhaps even intensify, over the coming year.”
The good news
As it turns out, UK businesses are actually the most optimistic out of the large economies surveyed, with a higher optimism rating than businesses in the US, the Eurozone, Japan and the average global confidence measure.
The UK’s business confidence has fallen since the last survey, but British businesses have remained significantly more optimistic than their counterparts overseas since the end of 2013.
Brighter in Blighty: the bigger picture
Last month, the International Monetary Fund forecasted that the UK would be the fastest-growing advanced economy.
It predicted that the UK will have grown 3.2% this year, and that it’s on track to grow a further 2.7% next year.
EY Item Club forecasted in October that UK economic growth will be 2.4% in 2015, down from the 3.1% it predicts for this year.
It said in its report that the political uncertainty caused by the general election in 2015 will mean fewer business will invest next year than this year.
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