The Markit Global Business Outlook Survey, which looks at expectations for the year ahead across 6,100 companies, showed optimism falling sharply in October, dropping to the lowest seen since the survey began five years ago. Hiring and investment plans were also at or near post-crisis lows, while price expectations deteriorated further.
The number of companies that expect activity to be higher in a year’s time exceeded the number expecting a decline by some +28 percent, but this ‘net balance’ had stood at +39 percent in the summer. Optimism in manufacturing fell to its lowest since mid-2013 but remained ahead of that seen in services, where confidence about the outlook slumped to the lowest in the survey’s five-year history. Looking at the world’s largest developed countries, business optimism fell across the board. Of all major countries surveyed, UK companies remained the most upbeat about the year ahead, despite expectations about future activity levels dropping to the lowest since June of last year in both manufacturing and services sectors. However, the most striking development was the extent of the downturn in the US, where optimism hit a new survey low, with the service sector seeing a particularly dramatic decline.
