CHICAGO — Optimism about the nation’s economic outlook among United States business leaders reached its highest level since 2004, according to the latest Grant Thornton International Business Report (IBR), a survey of more than 3,300 business leaders in 45 countries. In first quarter 2014, optimism among U.S. business leaders rose 30 percentage points to a net balance of 66 percent.
The increase in optimism in the U.S. economy is consistent with what is occurring in other global markets. According to the survey, net 44 percent of businesses globally are optimistic about the economic outlook. This marks the highest level since 2007, and a 17 percentage-point increase from the previous quarter.
A net balance of just 29 percent of U.S. business leaders cite economic uncertainty as a constraint on their ability to grow their operations in the next 12 months, down from 37 percent in the previous quarter.
There has also been marginal improvement in the United States regarding plans to invest in plants and machinery (net 43 percent), but plans to invest in research and development in 2014 (net 17 percent) remain flat.
“Following our nation’s political leaders reaching a short-term budget agreement late last year and as economic indicators continue to show improvement, the large increase in optimism among business executives could be indicative that we have moved into the first prolonged period of economic stability since the financial crisis,” said Stephen Chipman, chief executive officer of Grant Thornton LLP. “However, our country’s business leaders will continue to require consistent signs of stability in fiscal, public, and tax policies to feel confident about their decisions, including investing in their businesses, creating jobs, and growing their operations.”
The survey data reveal an improvement in sentiment about most areas of business performance. U.S. profitability expectations improved eight percentage points to a net 60 percent of business leaders expecting to see profits climb in the next year, following a two percentage-point decrease in the previous quarter. Hiring expectations in the United States increased to a net 45 percent, up seven percentage points from last quarter. Revenue expectations in the United States decreased to a net balance of 64 percent, just one point down from 65 percent the previous quarter and a substantial increase from net 46 percent a year ago.
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Publication date: 5/12/2014