Global business sentiment still negative – survey

by Louise Maureen Simeon – The Philippine Star, 20 Sep 2021

MANILA, Philippines — Businesses all over the globe have turned more pessimistic on recovery prospects, with the spread of the Delta variant and supply chain disruption still the major concern.

Based on the latest Global Risk Survey of UK-based Oxford Economics for September, a large proportion of businesses have turned more downbeat, citing severe supply chain disruptions such as material and component shortages and transportation bottlenecks, which may last until mid-2022.

“Many businesses have become more negative about global economic growth prospects over the past month as have become more positive. This brings to an end the pattern of improving sentiment seen since late last year,” Oxford said.

“Supply-chain disruption and the spread of the Delta variant feature prominently among key business concerns in the latest survey,” it said.

The flash survey was conducted on 129 businesses across sectors including financial institutions, industrial manufacturing and materials, professional and business services, and real estate, real estate finance and infrastructure, among others.

Eleven percent of the respondents were from the Asia-Pacific region.

The latest flash survey was conducted amid Delta-related disruption and mounting evidence that supply-chain bottlenecks are likely to persist.

Against this backdrop, almost half of the respondents said they view risks heavily to the downside and only a small proportion of businesses see risks to the upside.

While some have reported slow return of their businesses to pre-pandemic levels, the majority still expect recovery to be delayed, with one in every five businesses seeing rebound only after 2022.

“Respondents continue to put a relatively high weight on downside scenarios, with the greatest probability attached to a ‘long COVID-19’ scenario in which Delta and other variants result in a protracted period of public health restrictions,” Oxford said.

“Businesses see a greater chance of a delayed return to normal on the back of consumer caution and vaccine hesitancy,” it said.