Executives more optimistic about global economy

Executives report better conditions at home and in the global economy, but they also expect political and governmental issues to pose risks to growth, according to global consulting firm McKinsey.

Reportdely, growing shares of executives say their countries’ economies have improved, but domestic political conflicts weigh heavily as potential threats to growth, according to the firm's latest survey on economic conditions.

“This is especially true in the United States, where negotiations failed to avert the automatic government-spending cuts that went into effect the week before the survey was conducted,” McKinsey stated. 

Low consumer demand remains the most frequently cited risk to domestic and global growth over the next year, according to executives. “For the first time, though, we asked about political conflicts as a potential threat to growth – and this issue is not far behind. Political conflicts are now the second most cited risk to domestic growth (38 percent of all respondents say so), followed by insufficient support from government policy (cited by 37 percent of respondents).”

Compared with McKinsey's previous two surveys, respondents across regions express notably more positive views on current conditions in their own countries and the global economy, while their outlook for the next six months is still more optimistic than not. Looking at the next decade, executives also cite political conflicts most often as a risk to their countries’ growth, though responses vary by region.

The online survey was in the field from March 4 to March 8, 2013, and generated responses from 1,367 executives representing the full range of regions, industries, company sizes, tenures, and functional specialties. This was the week before automatic cuts to government spending went into the effect in the United States, and the week after an inconclusive general election in Italy. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

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