Europeans more positive than Americans about economy

The August results of McKinsey’s regular global economic conditions snapshot are out now and reveal some interesting differences of opinion between European and US executives.

The good news is that, globally, executives’ expectations for national economies and corporate prospects have remained more positive than negative and that the financial services reforms recently passed in the US have been well-received.

Top line results include:

European executives are more positive about the economy than their North American counterparts

Overall, executives have remained positive about their countries’ economic prospects, although there has been no significant improvement since the last survey in June 2010, following a year of steady improvement.

One major change, however, is that European executives are now more positive than North American executives about their countries’ prospects. In the June survey, this trend was the reverse.

US financial services reform has been generally well received

While the reform of US financial services has been generally well received, executives outside the US were more positive about it than those with headquarters in the US.

• 73% of executives outside the US say reform was a necessary step towards economic stability
• 61% of executives within the US say reform was a necessary step towards economic stability
• 66% say the global economy would be less prone to crisis with a global regulatory framework (see our post on global company reporting standards)
• Overall, 62% say they expect that governments will continue taking legislative action to regulate their financial services industry and that they think regulation is a good idea. When broken down, the figures stand at 69% for European executives and for North Americans, the figure falls to 49%.
• 34% of executives think that the US financial services industry law will have a somewhat positive effect on the competitiveness of the US financial services sector. When broken down, that figure stands at 25% of US executives and 46% for the rest of the world.

Companies are investing for the future

• 50% of all executives surveyed expect demand for their companies’ goods or services to increase by the end of the year
• 40% of executives expect demand to remain stable
• 75% of respondents expect their companies’ profits to rise this year
• 30% of executives expect to expand their workforce by the end of the year and a further 51% expect it to remain the same

Read more:

McKinsey Quarterly, Economic Conditions Snapshot, August 2010: McKinsey Global Survey results, August 2010

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