Economic sentiment improves among global CEOs

Every quarter, McKinsey surveys global executives to get a snapshot of economic conditions and business expectations. Highlights from the Economic Conditions Snapshot, April 2010 follow.

Heath care reform in the United States

• 63 per cent of US executives believe health care reform is a good idea
• 75 per cent of executives based outside the US believe health care reform is a good idea
• 48 per cent of US executives don’t understand how reform will affect the benefits their companies offer employees
• 49 per cent of US executives think reform will either have a positive financial effect or no effect at all on their companies
• 53 per cent of executives based outside the US say the competitive position of companies with a significant proportion of employees in the United States will be strengthened or remain the same as a result of the new law

My take: health care reform will not have a negative impact on US businesses

Company priorities

• Stabilising company finances is ranked as the number one priority by more CEOs than any other (23 per cent)
• Geographic expansion (16 per cent) and R&D/development of new products or services (14 per cent) came in next highest – both emphasise growth
• 42 per cent expect to hire new recruits in 2010

My take: CEOs are getting their businesses ready for growth

Prospects for national and global economic growth

• 66 per cent say economic conditions in their countries are better now than six months ago
• 66 per cent expect more improvement in national economic conditions by the end of the first half of 2010
• More than 80 per cent think their countries’ GDPs will increase in 2010 (the highest proportion since January 2009)
• 36 per cent say the likeliest description of the global economy in the near future is “constrained global markets perpetuate imbalances” (10 percentage points down on two months ago)
• 28 per cent agree that “stable fundamentals underpin global economic outlook” is a likely near future scenario – up eight percentage points

My take: there is still concern about the global economy but executives are more optimistic about the near term growth in their home countries

As well as the April results, you can see an interactive tool that charts how sentiment has changed over time. Click here to view.

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