Business sentiment improving – think tank

by Louise Maureen Simeon (The Philippine Star), 18 Jun 2021

MANILA, Philippines — Businesses all over the globe are turning more optimistic as the world recovers from the impact of the pandemic, with downside risks becoming less and less, an international think tank said.

Based on the June round of the Global Risk Survey of UK-based Oxford Economics, business sentiment has significantly improved and a sharp economic recovery is now highly likely, with downside risks already at the lowest levels.

“Respondents have become more optimistic about prospects for their own businesses. Almost half of respondents expect activity to have returned to pre-pandemic levels by the third quarter of this year,” Oxford said.

The flash survey was completed by 143 businesses from June 2 to 10 across sectors including financial institutions, industrial manufacturing and materials, real estate, real estate finance and infrastructure, and energy and natural resources.

Almost 20 percent of the respondents were from Asia-Pacific.

The survey was conducted amid mixed developments. COVID-19 cases are rising again in some economies while the pace of vaccine rollout has varied across countries.

Against this backdrop, a third of the respondents said they view risks as slightly to the downside while more are already viewing risks to the upside.

Overall, greater confidence in the global economic outlook is reflected in the increased probability businesses attach to relatively strong global growth outcomes.

The expectation for global growth this year has increased to five percent, up 1.7 percentage points from the start of the year, but still below the baseline forecast of 6.4 percent.

However, the world’s largest firms continue to raise concerns over price pressures, accompanied by a sharp, sustained rise in bond yields.

In recent surveys, firms were cautious about recovery in their own business, despite feeling more positive over global economic prospects.

This month, however, respondents report greater optimism about their own business activity.