U.S. executives' business outlook more positive than Europe

RP news wires

U.S. executives remain more bullish about their business prospects over the next 12 months than their European counterparts, according to the latest KPMG Global Business Outlook survey by KPMG International. The positive sentiment was strongest among manufacturing sector executives, whose optimism increased since they were surveyed in October 2009. U.S. service sector executives, while also generally optimistic, showed a modest decline in sentiment.

"Overall executives are telling us they are optimistic about the future, particularly in the United States, where the recovery appears to be taking hold more quickly than in Europe, as well as in the BRIC countries, which were generally less impacted by the downturn," said Mark A. Goodburn, vice chairman and head of advisory for KPMG LLP, a U.S. audit, tax and advisory firm.

Goodburn noted that the baseline for measuring business activity was set rather low as the market hit bottom last year, though manufacturing executives are clearly optimistic about prospects for growth in business activities, revenues and profit over the next 12 months.

Still Cautious on New Hiring
Despite an expected uptick in business activity, both manufacturers and service providers are somewhat hesitant to predict new hiring during the period, with the majority of respondents maintaining a neutral view on future hiring prospects.

"While generally positive, especially compared with other parts of the world, executives still show a sense of caution as the service sector continues to find its footing in this changed marketplace," said Goodburn. "But clearly we cannot ignore that the U.S. market seems to have begun to find its balance again overall, and we should note that hiring often lags demand."

Following is select data from the KPMG Global Business Outlook Survey:

U.S. Manufacturing Sector Executives
Business Activity: Seventy-one percent of the U.S. manufacturing executives said business activity would be higher in the coming 12 months, up from 65 percent in October; 5 percent said it would be lower, down from nearly 11 percent in the last survey; Globally, 61 percent of manufacturing executives expected improvement, up from 57 percent in October. The European Union showed 57 percent of respondents expected higher activity in the period, compared with 51 percent in October; while 68 percent of executives from the BRIC nations expected higher activity in the coming year, as opposed to 61 percent in October.

Employment: Executives indicated a rising trend line, however slight, as 34 percent expected higher employment, as opposed to 32 percent in October; 55 percent thought it would remain unchanged, compared with 53 percent in the last survey; 6 percent said it would be lower, half of the 12 percent reported in October.

Business Revenue: Sixty-seven percent of respondents expect revenue to rise in the coming 12-month period, up from 62 percent in October; just 6 percent said revenues would be lower, down markedly from 12 percent in the last poll.

Profit: More than 63 percent of manufacturing executives expected higher profits in the coming 12 months, up from 60 percent in October; just 6 percent expected lower profits, down from 14 percent in the last survey.

U.S. Service Sector Executives
Business Activity: Sixty-three percent of service sector executives expect high activity in the coming 12 months, down from 70 percent in October; 30 percent said activity would be the same in the coming period; 3 percent said it would be lower; Globally, 53 percent of service executives expected improvement, down from 56 percent in October. Just 53 percent of EU executives in the services sector expected higher activity, up slightly from 50 percent in October, while 62 percent of BRIC countries' executives anticipated a rise in activity, as opposed to 56 percent in the previous survey.

Employment: Thirty-three percent of U.S. service sector respondents expected higher employment, vs. 32 percent in October, and 59 percent said it would not change in the next 12 months, compared with 62 percent in October.

Business Revenue: More than 61 percent of executives expected revenue to be higher compared with nearly 69 percent in the last survey; 30 percent expected revenue to be the same in the next 12 months compared with the last similar period up from nearly 26 percent in the last survey.

Profit: Sixty percent of respondents expected a rise in profit, compared with 64 percent in October; nearly 5 percent expected lower profits, flat from nearly 6 percent last time; and 27 percent expected profits to be the same for the period, relatively unchanged from 28 percent in the last poll.

The KPMG Global Business Outlook Survey polls about 11,000 executives across 6,200 companies representing manufacturing and service providers in 17 countries. More than 332 U.S. manufacturing executives and 237 service-industry executives participated. 

Subscribe to Machinery Lubrication

About the Author