World business confidence cools, U.S. a bright spot
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Global business confidence cooled in June as the eurozone debt crisis took its toll, though corporate sentiment in the United States held up better, a survey from financial information firm Markit showed on Sunday.
The percentage of companies around the world that expected business activity to rise over the next 12 months outnumbered those anticipating a decline by a margin of 37 per cent, according to Markit's global business outlook survey.
That was down from a difference of 44 per cent in February, when Markit last did the survey of 11,000 manufacturing and services companies.
Even with the decline, the survey pointed to economic expansion, Markit said, and sentiment was still better than October's post-crisis low, when optimists exceeded pessimists by 32 per cent.
Hiring intentions for the next year also waned, with 17 per cent more companies planning to expand over those that did not, down from a gap of 19 per cent in February.
"Businesses globally have scaled back their expectations for business activity, revenues and profits growth compared to earlier in the year, which has in turn led to a deterioration in the employment outlook," Chris Williamson, chief economist at Markit, said in a statement.
Expectations for business activity in the euro zone dropped off, to a margin of 16 per cent from 26 per cent.
The United States fared much better, with those that expected activity to pick up outpacing those that did not by 57 per cent, though that was down from 69 per cent earlier in the year.
Global capital spending plans were unchanged, with a net difference of 14 per cent. U.S companies that intended to increase investment outstripped firms that planned to pull back by 21 per cent, a new high for the survey. In the eurozone, spending was seen falling.
"Increased capital investment suggests that companies have by no means withdrawn into purely cost-cutting mode, especially in the U.S., which looks set to remain a bright spot in the global economic picture in the coming year," said Williamson.
Price pressures were seen easing, providing some relief for companies after a ramp up in costs earlier in the year.
The difference between those that expected input costs to rise this year and those that did not fell to the lowest since October 2009, at 20 per cent from 27 per cent.
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