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McKinsey Economic Conditions Snapshot

An interesting report from McKinsey and Company.  The June 2011 Economic Conditions Snapshot Report is essentially a survey of the global mood of CEOs.  Needless to say that CEOs are getting more pessimistic in their economic outlook for their respective companies.

The first analysis asked the question to CEOs in different regions around the world, “What is your economic condition compared to six months ago?”

Regions Substantially or Moderately Better Same or Worse
Total 48% 52%
Asia 33% 67%
Europe 50% 50%
N. America 52% 48%

I’ve highlighted the lowest and highest percentage scores for each of the two categories.  Asia is the gloomiest and, somewhat surprisingly, we Americans are the most optimistic.

McKinsey then asked the questions, “What will your economic condition be six months from now?”

Regions Substantially or Moderately Better Same or Worse
Total 48% 52%
Asia 44% 56%
Europe 45% 55%
N. America 48% 52%

Again, Asia’s CEOs are the most pessimistic and we Americans are somewhat more optimistic about the future.

But what accounts for Asia’s gloom?  According to McKinsey, the earthquake, tsunami, and nuclear catastrophe in Japan have shaken the near term confidence of CEO’s in Asia.  Most likely true. But  I also think it is the realization of  most CEOs, especially in China, that the US is not going to lead the world out of the economic doldrums as it has in the past.  In fact, the US has a long slog due to the housing bubble collapse, the loss of wealth that was largely tied up in our houses,  continued budget problems in Washington, just overall uncertainty.   Looking at the aggregate scores for all the regions for both questions and the results are pretty gloomy.  Overall, most of the world thinks things will get worse before they get better.  Not terribly uplifting.

Here is the link to the report.  You have to register to read the full report but it’s well worth the effort.


About NorthwestExpat

Economic developer and hobbyist photographer. My passions are family, skiing, hiking, Newfs, travelling and exploring the Great Northwest.


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