Our most recent survey of economic conditions was in the field from March 7 to March 11, 2011, a week when Libya, which has the largest oil reserves in Africa,1 fell into near civil war and oil prices fluctuated. The earthquake and tsunami in Japan, given their timing, did not have a meaningful effect on results.
Accordingly, executives are far more concerned about the effects of inflation and high commodity prices than they were in December. Yet their overall expectations for their nations’ economies and for their own companies’ prospects have changed little from three months ago, when they were slightly more positive than not.2 Low consumer demand remains a concern but a much less urgent one. Also at the national level, less than 20 percent of respondents expect unemployment in their countries to increase in the next six months.
That’s consistent with the expectation of the vast majority of respondents that their companies’ workforces will remain the same size or increase during this period. Among those who report that their companies are hiring right now, more say they can find all the people they need than those who say they can’t, and only 20 percent of respondents say their companies aren’t hiring at all. More broadly, executives’ expectations for their companies’ results are positive and flat overall since December, and nearly half expect to increase capital expenditures in the next six months.
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