Global outlook takes a hit as Germany joins worsening slump

Tim Wallace
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GLOBAL business confidence slumped last month, led by declines across much of the Eurozone, according to data published today by Markit.

A net balance of 37 per cent of firms expect activity to increase in the next year, indicating slower expansion than the 44 per cent recorded in February.

That slowdown also extended to the jobs market, with a net balance of 17 per cent expecting to take on more staff in the next 12 months, down from 19 per cent in February, with manufacturers leading the decline.

Confidence fell sharply in Germany, where a net balance of just 16 per cent expect to expand in the year, down from 37 per cent four months ago. Italy and Spain all recorded similarly low optimism figures, leading to negative employment expectations – a net balance of 10 per cent of Italian firms and 16 per cent in Spain expect to cut headcount.

Business confidence also slumped in the UK and US, though net balances of 38 and 57 per cent remain above those in the Eurozone.

Meanwhile optimism slowed in China and Brazil and dropped sharply in Russia, dragging down capital expenditure expectations in all three. However, India stood out among the BRIC nations with rising employment intentions.

“The recent deterioration of business optimism and employment intentions is clearly centred on the Eurozone and Germany in particular, where confidence has fallen to levels similar to the downbeat moods evident in France, Spain and Italy,” said Markit’s Chris Williamson.

“However, the survey provided some hope, because global business optimism remained higher than the post-crisis low seen late last year.”