That level is nearly double the 17 per cent who expressed optimism in the previous quarter, but far below the 55 per cent who were optimistic a year ago, according to PricewaterhouseCoopers Management Barometer.
enior executives at US multinationals have also reported rebounding optimism, with 63 per cent saying they are now optimistic, compared with 34 per cent in the prior quarter.
More European executives, meanwhile, held a positive view of the world economy, with 49 per cent optimistic, compared to 42 per cent in the US.
Attitudes of top European and US business executives have returned to nearly the levels they had reached before the war in Iraq,’ said Frank Brown, PricewaterhouseCoopers’ global leader of Assurance and Business Advisory Services.
‘But European executives are more upbeat about the world economy than the EU economy, suggesting that the Europeans are looking to the US to be the prime growth engine for a worldwide economic recovery.
Surveyed European executives project that over the next 12 months revenue growth for their company will average 4.
per cent, up from their 3.
per cent estimate for calendar 2003.
Their American counterparts are expecting growth of 7.
n addition, the percentage of large European companies planning major new capital investments over the next 12 months increased quarter-to-quarter from 35 to 41 per cent, with average spending expected at 8.
per cent of revenues.
A year ago, only 32 per cent were planning new investments, at 8.
per cent of revenues.
mong European companies planning increased spending, 39 per cent cite higher budgeting for information technology; 30 per cent for geographic expansion; 30 per cent, facilities expansion; 29 per cent, business acquisitions; 27 per cent, new product or service introductions; 24 per cent, marketing and sales promotion; 17 per cent, advertising; and only 14 per cent, research and development.
Recovery will depend on executives who are not paralysed by the sluggish economy, but are willing to resume prudent risk-taking and investment,’ Mr Brown said.
ver the next 12 months, 14 per cent of large multinationals in Europe plan workforce expansion while 50 per cent expect to downsize their staff.
In the US, 35 per cent are expecting to add workers and 22 per cent plan a net reduction.
An average loss of 1.
per cent of workforce is anticipated for Europe-based multinationals, compared to a gain of 0.
per cent in the U.
ther top concerns include legislative and regulatory pressures, competition from foreign markets, decreasing profitability, and monetary exchange rates.
ricewaterhouseCoopers’ Management Barometer is a quarterly survey of top executives in large, multinational businesses spanning technology, financial services, and consumer and industrial products and services.