Over the past three months, executives around the world have grown more pessimistic about their nations’ economies: compared with three months ago, a smaller share say their economies improved over the past six months, and slightly more expect worsening conditions over the rest of 2011, according to our most recent survey.1 At the same time, executives seem to be more intently focused on economic fundamentals and are far less worried about geopolitical instability damaging the economy than they were in March.
Notably, the share of executives in Europe who see improvement has fallen very little compared with the drops among those in North America and the developed countries of Asia,2 even though the eurozone has been under much-publicized pressure throughout the spring because of Greece’s financial problems. Indeed, 57 percent of all respondents say it’s at least somewhat likely that the eurozone will splinter within the next two years.
However, pessimism about economic conditions hasn't spread to executives’ expectations for their companies. On the whole, expectations for hiring, profit, and customer demand remain positive and stable compared with three and six months ago. The contrast between lower economic expectations and solid corporate expectations is particularly notable among respondents in the developed economies of Asia.