Optimism bounces back amongst businesses around the world (Armenian)

10 February 2010

Optimism amongst privately held businesses (PHBs) around the world has bounced back to give the Grant Thornton global optimism/pessimism index for 2010 an optimism balance of +24%, compared to its lowest ever score of -16% this time last year. The International Business Report (IBR) survey of over 7,400 PHBs across 36 economies, now in its 18th year, also highlights a group of ten economies where businesses are more optimistic about the outlook for their economies than International Monetary Fund (IMF) forecasts might suggest.

Businesses in Chile, India, Australia, Vietnam and Brazil are the most optimistic in the world, all scoring over +70%. The biggest swing in sentiment was in Hong Kong which moved from deep pessimism last year (-49%) back to an optimistic +64% this year (a 113% rise). At the other end of the scale, many eurozone countries remain pessimistic about the future; Italy, Denmark, Finland and France all scored +9% or lower with Greece (-23%) and Ireland (-42%) even more gloomy. Spain (-56%) and Japan (-72%) kept their places as the most pessimistic economies in the world, although even here the figures were slightly up on last year.

Armenian businessmen are less optimistic in their forecast for 2010, showing +32% against the last year's +46%, and are positioned very close to the global average indicator.

When compared to the IMF's GDP figures for 2009, economies that avoided recession (for example, Australia, mainland China, India and Vietnam) or suffered a relatively minor recession (such as Brazil, Hong Kong, Canada and New Zealand) all feature, not surprisingly, at the top of the league table.

The survey also found that expectations of increased revenues in 2010 came out highest (at +40%) when respondents were asked to rank likely business trends in 2010. Increased turnover was followed by the surprisingly positive view that investment in plant and machinery (+31%) and profitability (+29%) would both increase. Businesses were much less hopeful about selling prices with 21 out of 36 economies less optimistic about increasing their prices than they were in 2009.

Alex MacBeath comments, "This suggests that during the recession businesses have become leaner and more cost effective which may enable them to lower prices while still securing increased revenues and, crucially, profits. As the global economy emerges from recession, we are likely to see many businesses reaping the rewards of recession induced efficiencies to lead the way in the upturn."



When asked about employment expectations in 2010, European businesses were far more pessimistic than their counterparts elsewhere in the world; a negative balance of -1% in Europe compared to balances of +33% and +42% in Asia Pacific and Latin America respectively.

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