May 2020: World Business Economic Sentiment

Economic sentiment has improved since last month, per our latest survey of global executives on C-19 coronavirus chaos and the economy. Still, their near-term outlook remains more negative than positive.

Since early April, a growing number of businesses and governments around the world have begun to reopen, ushering in a new phase of the C-19 coronavirus chaos.

Likewise, the results from the latest McKinsey Global Survey on the economy conducted from 4-8 May 2020 point to an improving outlook.

Executives are now much likelier than in April or March to expect improving conditions and increased growth rates in the months ahead.

Yet, executives are still more negative than positive in their expectations for their home economies and the world economy at large, as they were 1 month ago.

And as the results show, the path forward is different across regions and industries.

Executives in Greater China were the most optimistic about domestic economic conditions in April and remain so this month: 75% expect conditions to improve in the next 6 months, up from 63% previously.

In the EU 34% say the same. But they are notably more positive about their economies than they were 1 month ago.

Among all regions, respondents in India report the largest shift toward positive sentiment since last month.

At the company level, respondents most often cite weak consumer demand as a threat to their organizations’ growth.

But other risks loom large in certain sectors.

Respondents in financial services cite volatile financial markets as the biggest threat to company growth.

And according to respondents, supply-chain disruptions present an outsize risk in several industries, namely: pharma, chemicals, consumer and packaged goods, and automotive and assembly.

When asked respondents in industrial and manufacturing sectors about value-chain disruptions resulting from the coronavirus, just 15% say C-19 coronavirus has not caused a material disruption to their value chains, and another 1/3rd say the current disruption is the worst their companies have ever experienced.

Have a healthy Memorial Day, Keep the Faith!

#business#C-19#coronavirus#disruptions#executives#May#negative#positive#sentiment#survey