A year after the global economic system nearly collapsed (II)

McKinsey received responses from 1,677 executives, representing all regions, industries, company sizes, and functional specialties for their last Global Economic Conditions Survey, dated September 2009:

  • Executives in China are no likelier than others to say that an upturn has already begun, but they are particularly hopeful about their own country’s prospects: 82% expect its GDP to increase in 2009, and 30% expect its GDP to regain pre-crisis levels in 2010.
  • As has been true throughout the crisis, large public companies are much likelier to decrease the size of their workforce than small private ones – although these two kinds of companies don’t have different expectations for customer demand or profits.
  • Fears that countries will restrict international trade seem to have receded in the past six months: 42% of respondents now expect it to rise in the long term, compared with just 16% half a year ago.
  • Although just under half of all respondents expect tighter credit at the national level over the next five years, less than 10% expect sales to fall because consumers or businesses can’t get credit.

What’s next?

  • Most companies are managing in a new normal, with an enlarged role for government and lower long-term growth expectations.
  • Innovation is more important than ever; the companies that have the highest hopes for their own futures are likeliest to be focusing on it.
  • January was the month when executives expressed the direst views about the economy. They now look forward to economic growth, but few expect a quick, full recovery.
  • Executives indicate that the past year has slowed but not stopped globalization – and that skepticism about the value of free markets will continue as well.

For more details, you may find the full report at:
http://www.mckinseyquarterly.com

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