Businesses Show Growing Optimism Amid Global Challenges
Dun & Bradstreet released its Q3 2024 Global Business Optimism Insights report, highlighting increased optimism despite geopolitical tensions and supply chain disruptions. Notable findings include a 12.3% rise in global business optimism, driven by expected growth in sales and new orders, and a 23.3% increase in investment confidence due to favorable operating conditions and reduced borrowing costs. Regional highlights show a 17% recovery in U.S. business optimism and significant increases in the ICT sector, while the U.K. saw a 4% decline. Other regions such as Indonesia and Japan showed increases of 20% and 22%, respectively. Smaller businesses showed increased optimism in liquidity risk and M&A opportunities. The report's five indices, including supply chain continuity and ESG initiatives, saw improvements, reflecting a positive outlook amid easing global inflation and supportive monetary policies.
- Global business optimism increased by 12.3%.
- Financial confidence rose by 23.3% due to easing interest rates.
- U.S. business optimism grew by 17%, driven by the ICT sector.
- Indonesia and Japan saw increases in business optimism of 20% and 22%, respectively.
- Improved macroeconomic conditions boosted expectations for sales and new orders.
- Smaller businesses are more optimistic about cash flow and M&A opportunities.
- U.K. business optimism declined by 4%.
- Large businesses' optimism in supply chain continuity worsened due to ongoing global challenges.
Insights
The increase in global business optimism highlighted in the report signals a positive shift in economic sentiment. A significant surge in the Global Business Investment Confidence Index by
For retail investors, this means that businesses across various sectors are likely to see increased capital inflows and may pursue aggressive growth strategies. This could translate into higher stock valuations for companies that are viewed as attractive investment opportunities, particularly in industries like digital, fintech and AI. However, investors should remain cautious and consider potential downside risks, such as policy uncertainty and geopolitical tensions, which could affect market stability.
The regional variations in business optimism are important for understanding market dynamics. The report indicates a notable recovery in the U.S., with a
Conversely, the decline in business optimism in the U.K. by
The slight improvement in the Global Supply Chain Continuity Index by
Retail investors should pay attention to companies that are actively enhancing their supply chain resilience, as these firms might be better positioned to handle uncertainties and maintain steady growth. Additionally, the focus on reducing borrowing costs and improving liquidity management among smaller firms could lead to better financial health and growth prospects for these companies.
Dun & Bradstreet Q3 2024 Global Business Optimism Insights report finds improved growth optimism despite continued geopolitical tensions and supply chain disruptions
Worldwide, businesses have rallied against persistent geopolitical tensions and supply chain disruptions, with global business optimism and financial confidence rising by more than
“The improved optimism among businesses demonstrates resilience in navigating global disturbances by adapting to the ‘new normal’ and leveraging emerging opportunities,” said Neeraj Sahai, President of Dun & Bradstreet International. “Surge in investment confidence among businesses indicates higher capital requirements and a more buoyant M&A environment for inorganic growth. As we look with an eye toward the next quarter, it should be with cautious optimism, as policy uncertainty associated with upcoming elections globally persists.”
Regionally, business optimism in the
Key findings from the Q3 2024 report’s five indices*:
-
The Global Business Optimism Index increased
12.3% on the back of expected growth in sales, new orders, and favorable input costs amid easing global inflation. The increase in optimism is in sync with the latest upward revisions in global GDP forecast for 2024 by multilateral agencies. Globally, ICT, Wholesale & retail, and textile are the most optimistic sectors. -
The Global Supply Chain Continuity Index saw a marginal improvement of
1.2% stemming from businesses adjusting to the new supply chain environment, which continues to be disturbed by geopolitical tensions, longer shipping routes and climate-related disruptions. Large businesses’ optimism deteriorated significantly reflecting the challenges of an interconnected global supply chain. However, smaller businesses are more optimistic as they expect to reduce their supplier concentration risk. -
The Global Business Financial Confidence Index improved
12.3% as businesses are optimistic about their operating conditions and liquidity risk. Smaller businesses, that may previously have been relatively constrained in their approach to liquidity risk management, are now more optimistic about cash flow management given growing expectations of falling borrowing costs. -
The Global Business Investment Confidence Index increased
23.3% , signaling a meaningful uptick in optimism for capital spending, backed by an accommodative global monetary policy. Globally, small and medium-size businesses were more confident about the environment for M&A activity than larger businesses, likely because they see themselves as potentially attractive acquisition targets, especially promising startups in digital, fintech, and AI. -
The Global Business ESG Index increased
8.0% as businesses look to re-engage their sustainability initiatives. In the survey, more than one in two respondents indicated increased funding for ESG-related activities.
*Descriptions and information about the indices can be found on page 23 of the report.
“Improvement across all five indices indicates the optimism for an accommodative monetary policy regime globally among businesses,” said Arun Singh, Global Chief Economist, Dun & Bradstreet. “This optimism is further fueled by improved macroeconomic conditions as businesses are notably upbeat about sales and new orders. Further, improvement in supply chain continuity indicates that businesses are adapting to the ever-evolving global landscape.”
About the Global Business Optimism Insights Report
The Global Business Optimism Insights report is a synthesis of data from a comprehensive survey encompassing 32 economies, covering approximately 10,000 businesses and 17 sectors, alongside insights from Dun & Bradstreet, leveraging the firm’s proprietary data and economic expertise. The report is an amalgamation of five indices which reflect overall business optimism and expectations about supply chain continuity, financial and investment conditions and ESG initiatives. An index reading above 100 indicates an improvement in optimism relative to the base year (Q3 2023 to Q2 2024), while an index reading below 100 signifies a deterioration in optimism.
View the full report here.
About Dun & Bradstreet
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet’s Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk, and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.
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Dawn McAbee
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Source: Dun & Bradstreet
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