Global business confidence rises, but job prospects mute

Companies globally are showing growing optimism about their prospects in the next 12 months, even as the confidence about new jobs remains muted, according to a survey by KPMG International.

The KPMG global business outlook survey of over 11,000 companies across the world found healthy optimism around key measures such as business activity, revenues and profits.

Net balance for global business activity in manufacturing increased to 50.9 from 42.9, while in the services sector, it edged down slightly to 44.0 from 46.5.

“This suggests a firm majority believe their businesses will be getting busier in the coming 12 months,” the report stated.

However, one area in which global confidence does remain “somewhat muted” is regarding the prospects for further employment.

For employment prospects, the neutrals - who neither expect to increase or reduce headcount - hold sway, accounting for 53 per cent and 60 per cent of manufacturing and services respondents, respectively.

The survey works on a net balance basis, with percentage of respondents feeling more pessimistic about their company’s outlook in the 12 months’ time deducted from percentage feeling more optimistic about the future.

“What we are seeing here is evidence of a properly robust recovery across numerous key markets which is set to run through until at least spring 2011. Admittedly, we are coming at this from a pretty low base in terms of the nadir which the survey numbers hit in late 2008,” KPMG Global Head of Advisory Alan Buckle said.

Interestingly, results from the BRIC (Brazil, Russia, India and China) countries do tend to put the others - with the exception of the US - somewhat in the shade.

The BRIC countries’ business activity expectations in manufacturing, now boast a net balance of 63.4, with Brazil leading the way at a staggering 84.2.

Only the US (at 65.7) comes near to matching the BRIC numbers. The European average is 43.4, with Britain as the stand-out performer at 57.9.

In the services sector, BRIC optimism runs at 58.3 and is matched by the US at 60.3, while Europe is at 39.5.