In McKinsey’s latest survey global executives report a gloomier outlook than a month ago, 67% expect a sizable contraction in the world economy, and a most predict declining company profits.
The COVID-19 chaos spread quickly across and within geographies, and now executives share growing concerns about its economic impact and, varying by region, dramatic shifts in their views since the beginning of March.
Responses to the latest McKinsey Global Survey on the economy, conducted from 6-10 April 6 revealed that overall sentiment is more negative than it was last month.
For example, 67% of respondents expect a moderate or significant contraction in the world economy’s growth rate that is, a recession or a depression. In early March, only 42% said that. And 56% say the same thing about growth in their home economies, up from 24% a month ago.
Respondents’ overall outlook for their home countries and the global economy has changed less in the past month, though their views remain downbeat. At least 60% believe that conditions in their home economies and in the global economy will worsen in the coming months.
At the company level, prospects are especially grim.
Respondents are nearly 2X as likely as they were 1 month ago to say that the profits of their companies will decrease in the next few months, at 61%, that is the largest share to report a negative outlook on profits since McK began asking the question, in the wake of the Y 2008 financial crisis.
Nevertheless there are bright spots.
Respondents in America expect improvements in the months ahead. That coincides with our assessment here at HeffX-LTN.
Have a healthy weekend, Keep the Faith!