Economic Conditions Snapshot, August 2009: The economy at large

McKinsey Global Survey Results show that, overall, thinking about financial and other effects of the crisis and their companies’ current position, just over 2/3 of respondents expect their companies to emerge from the crisis stronger. However, when that will happen is much less clear; while executives indicate that the economy as a whole is healthier now than it has been in some time, they don’t expect much further improvement soon.

A comparative analysis shows that respondents’ views on a range of trends affecting businesses and the economy are slightly more optimistic overall than they were in June, and notably more optimistic than they were in March. Similarly, the share of executives saying that their nations’ economies are better off now compared with last September is notably larger than it was six weeks ago. But the share expecting improvement in economic conditions by the end of 2009 has barely changed and more than twice as many executives still expect their nations’ GDPs to fall in 2009 as to rise.

Although 37% of the respondents do expect economic conditions to be better at the end of this year than they are now, conditions are so poor that only 20% of all respondents expect an actual economic upturn in 2009, a fall of 8% points in six weeks. Even when stock markets are booming, it seems, executives think there’s still a long way to go.

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4 thoughts on “Economic Conditions Snapshot, August 2009: The economy at large”

  1. I would expect nothing less than for companies to come out of a crisis of this magnitude stronger – and not by choice. The significant cost cutting that has been the necessary for the past two years has made companies very lean. While the article notes the economy is “healthier as a whole”, I fear that some of these companies have cut too much and may be disadvantaged as the economy rebounds.

  2. Brian – I agree that many companies have cut too much and they’ll suffer more for it when things do turn around.

    Overall I think the uncertainty that loomed in the last quarter of 2008 and the first two quarters of 2009 is beginning to clear. Many indicators show that sectors of the economy are starting to turn the right direction, however the lagging sectors (utilities, construction, etc.) are only now beginning to hit the bottom and it could be six months to a year before those show positive signs.

    Companies that were smart in cutting costs should be positions to respond to increased demand when things turn around, however for the U.S. economy to truly be stronger in the long-run and less susceptible to such shocks we’ll need to rethink our entire competitive strategy both nationally and locally.

    Just my two cents…

  3. the economy just took a break..
    in a matter of time everything will go back to where it all should be..we had experienced it before and surpassed it..it is just a cycle..

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