The outlook for business growth
2014 was the year in which the global economic recovery took hold according to our International Business Report, not just in in the UK and US, but in some of the European economies hit hardest by the sovereign debt crisis: Ireland, Spain and even Greece showed nascent signs of recovery. However, recent economic, political and social turmoil is weighing heavily on business leaders’ minds as we enter 2015 with confidence slipping, reflecting well-founded concerns about the unevenness of the global recovery.
Drawing on more than 10,000 interviews with business leaders and international economic forecast data, this report explores the growth drivers and constraints facing dynamic businesses over the next 12 months, including the oil price drop, eurozone crisis and inflation.
- global economic growth forecasts have been scaled back due to weakness in the eurozone and Japan, and uncertainty caused by the oil price drop
- 2014 was the best year for business optimism since 2007, but confidence dropped in the final three months of the year
- business expectations for sales and profits remain strong, but also fell away in the final quarter of 2014
- the outlook for exporting businesses is strong, particularly in Europe
- business investment remains fairly flat, but there is evidence of an increased focus on R&D
- economic uncertainty remains the major constraint on business expansion, followed by rising energy costs and bureaucracy
- businesses globally are creating more jobs than this time last year
- low inflation could boost demand in the short-term, but longer-term could raise the value of debt repayments and choke off the recovery.