Eight years of ultra-low interest rates and corporate balance sheet repair jobs have done their bit for the global economy. And a new bout of political uncertainty isn’t going hamper the recovery, according to middle-market companies.
A new survey of 2,340 executives across the globe, who handle annual revenue between $1 billion and $3 billion each, found 34% expect to grow by an ambitious 6%-10% this year.
“Most companies are unfazed by the state of uncertainty and are forecasting to grow more than twice as fast as GDP,” said EY, which conducted the survey.
The World Bank’s latest global GDP forecast is for a growth rate of 3.4%.
“Uncertainty is the new normal. “Executives not only ARE attuned to it, but are seizing it to grow, disrupt other markets and drive their growth agendas.”
U.S. companies were a little more modest, with a majority of respondents forecasting a still-solid growth rate of 5%, even as uncertainty hangs over Donald Trump’s plans to slash corporate taxes.
Britain’s vote last year to leave the European Union isn’t dulling optimism either, at least this survey showed, with most UK respondents forecasting growth of 11%-25%.
Most executives in Asian economies, including China and India, are projecting 6%-10% growth.
Economic recoveries in developed economies, and signs China’s economy has stabilized, weren’t the sole confidence builders. Uncertainty itself, whether in cyclical or structural terms, is also presenting smaller businesses with an opportunity to disrupt their larger peers.
Some 89% of the executives questioned saw uncertainty as an opportunity to grow.
Take Brexit, for example. Big companies including established banks could be forced to shift thousands of jobs and operations out of London, potentially falling into the hands of more nimble fintech start ups.
“Uncertainty is the new normal,” EY said. “Executives are not only attuned to it, but are seizing it to grow, disrupt other markets and drive their growth agendas.”
To be sure, CEOs at America’s biggest companies are confident in the outlook, too. A poll of 143 of them released yesterday by peer group Business Roundtable showed their confidence levels have reached a three-year high, owing to favorable underlying economic conditions and sustained confidence that Trump can get his tax cuts through.
“The dystopian vision of large-scale layoffs is not shared by these business leaders,” EY said.