The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products
Issue link: http://read.uberflip.com/i/1058204
W ondering how business executives around the world are feeling about current economic conditions? In a nutshell, sentiment on the economy is declining, particularly in emerging markets, and more businesses are looking to the United States for opportunities, according to a McKinsey & Co's Eco- nomic Conditions Snapshot, September 2018, a McKinsey global survey. For the third consecutive quarter, the survey's respondents, who represent the "full range of regions, industries, company sizes, functional specialties and tenures," are less optimistic on the economy and more cautious for the coming months. A full 35 percent of participants indicated moderately worse or substan- tially worse sentiment regarding current economic conditions in their home countries, up from 15 per- cent six months ago. And while 36 percent of these respondents believe current conditions are moderately or substantially better, this is down from 59 percent in the March 2018 survey. "Expectations for trade activity are declining, trade-related risks are still perceived as top threats to growth, and for the first time this year, less than half expect the rate of economic growth, both at home and globally, will increase over the next six months." is sentiment is more dire for respondents in emerging markets, who have a more negative overall assessment of the global economy, economic condi- tions in their own countries, and their companies' prospects. In some instances, these executives view U.S. opportunities as better for their businesses than those in their own or nearby economies. For all respondents, worsening sentiment about their own and neighboring countries' economic pros- pects is in contrast to the survey conducted six month ago, with current results suggesting the best business opportunities may be shifting from emerging econ- omies (such as China and Brazil) toward developed economies, such as the United States. In developed Asia, respondents now cite the United States most often for their best business prospects. In the past two surveys, participants in developed Asia chose China and Japan most often. is is also the case in India, where respondents from the country now view the opportunities for their businesses as being better in the United States than in India, which was cited most often in McKinsey's past two surveys. In Latin Amer- ica, participants are now less likely to cite Brazil for the best business prospects than they did six months ago, but in both Latin America and in North America, Mexico is now viewed as a more attractive business destination. Looking ahead six months, fewer respondents than in the past two surveys believe economic conditions will improve globally and in their home countries. For the global economy, 41 percent of participants in the September 2018 survey foresee moderately worse or substantially worse economic conditions, up from 15 percent in December 2017. Only 25 percent of respondents believe the next six months will be mod- erately or substantially better for the global economy. is figure stood at 51 percent in December 2017. Attitude matters Global economic sentiment is declining [ THE BIG PICTURE ] By Jennifer Molloy Thirty-four percent of respondents expect moderately or substantially worse economic conditions in the next six months, up from 20 percent in the December 2017 survey. 28 REALASSETS ADVISER | D E C E M B E R 2 0 1 8