Businesses Show Growing Optimism Amid Global Challenges

Rhea-AI Summary

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.

Positive

• 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.

Negative

• U.K. business optimism declined by 4%.
• Large businesses' optimism in supply chain continuity worsened due to ongoing global challenges.

Financial Analyst

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 23.3% is particularly noteworthy, reflecting businesses' growing readiness to increase capital expenditure. This uptick in investment confidence, driven by expectations of favorable operating conditions and reduced borrowing costs, suggests that companies anticipate a conducive environment for growth and expansion.

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.

Market Research Analyst

The regional variations in business optimism are important for understanding market dynamics. The report indicates a notable recovery in the U.S., with a 17% increase in business optimism, while the ICT sector showed a remarkable 51% surge in confidence. This sectoral optimism reflects a broader trend of increasing reliance on technology and digital transformation, which could be a strong growth driver for tech stocks.

Conversely, the decline in business optimism in the U.K. by 4% signals potential challenges ahead. Investors should consider diversifying their portfolios to mitigate risks associated with regional economic downturns. The improved optimism in Asia-Pacific, particularly in Indonesia and Japan, points towards emerging market opportunities that could offer higher returns for patient investors.

Supply Chain Expert

The slight improvement in the Global Supply Chain Continuity Index by 1.2% indicates businesses' increasing adaptability to ongoing disruptions. Small businesses' higher optimism suggests that they are finding ways to mitigate supplier concentration risks, such as diversifying their supply bases. This trend could result in more resilient and flexible supply chains, potentially reducing the impact of future geopolitical or environmental disruptions.

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

JACKSONVILLE, Fla.--(BUSINESS WIRE)-- Dun & Bradstreet (NYSE:DNB), a leading global provider of business decisioning data and analytics, today released its Q3 2024 Global Business Optimism Insights report. The latest quarterly report shows increased optimism across all five indices – business, supply chain continuity, financial and investment conditions, and ESG initiatives – for the first time since the launch of the report in Q3 2023.

Worldwide, businesses have rallied against persistent geopolitical tensions and supply chain disruptions, with global business optimism and financial confidence rising by more than 12%. Additionally, the steps taken by most central banks towards easing interest rates have bolstered optimism, with global financial confidence increasing more than 23%. Driven by improved macroeconomic conditions, businesses are notably optimistic about sales and new orders, while financial and investment confidence has surged due to expectations of favorable operating conditions and reduced borrowing costs.

“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 U.S. showed a notable recovery, rising by nearly 17% for Q3. This was reinforced by service-oriented businesses, particularly within the information and communications technology (ICT) sector where optimism increased by 51%. Germany witnessed a nearly 10% increase, supporting the overall European economic sentiment. The Asia-Pacific region also saw prominent increases particularly in Indonesia (20%) and Japan (22%). Conversely, the U.K. saw a nearly 4% decline in business optimism.

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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Media

Dawn McAbee

904-648-6328

Mcabeed@dnb.com

Source: Dun & Bradstreet

FAQ

What is the latest update from Dun & Bradstreet on global business optimism?

Dun & Bradstreet's Q3 2024 Global Business Optimism Insights report shows a 12.3% increase in global business optimism despite ongoing geopolitical tensions and supply chain disruptions.

How did U.S. business optimism perform in Q3 2024 according to Dun & Bradstreet?

U.S. business optimism rose by nearly 17% in Q3 2024, with significant growth in the information and communications technology sector.

What are the key findings of Dun & Bradstreet's Q3 2024 report on financial confidence?

The Q3 2024 report indicates a 23.3% surge in global financial confidence, driven by favorable operating conditions and lower borrowing costs.

How did business optimism in the ICT sector change according to Dun & Bradstreet?

The ICT sector saw a 51% increase in business optimism in Q3 2024, contributing to the overall growth in U.S. business confidence.

What regions showed the most significant increases in business optimism in Dun & Bradstreet's Q3 2024 report?

Indonesia and Japan saw notable increases in business optimism, rising by 20% and 22% respectively in Q3 2024.

What was the trend in business optimism in the U.K. according to Dun & Bradstreet's latest report?

The Q3 2024 report indicates that business optimism in the U.K. declined by nearly 4%.