Business confidence has come surging back across virtually all geographies and industries, according to the latest Business Outlook survey from KPMG International.
The latest figures - which reflect confidence in expected performance over the next 12 months - suggest that recent signs of economic improvement are no flash in the pan and that a global recovery could now be well under way.
The survey findings, compiled by research firm Markit Economics on behalf of KPMG International, show confidence in future business activity running at +42.9 in manufacturing and +46.5 in services. For the US and the BRIC economies, those figures rise to +54 and +54.1 respectively in manufacturing and +65.6 and +51.9 respectively in services.
Similar numbers are posted for confidence around future new orders and business revenues. Despite all the cost pressures, even confidence around improved profits stands at +32.1 globally for manufacturing and +36.2 for services.
Prospects for increased employment in 12 months' time are slightly less rosy - at +7.8 for manufacturing and +16.9 for services - suggesting that the recovery has some way still to run before all companies start thinking about full recruitment once more.
"The latest Business Outlook numbers clearly demonstrate that almost all of us have turned the corner in terms of economic recovery," notes Alan Buckle, Global Head of Advisory at KPMG. Buckle reveals that in nearly all sectors and geographies, business leaders are expecting improvements in their earnings and their business environment. He adds that a strong majority sees business being better in 12 months time than now; something which is consistent with GDP forecasts.
"This represents a quite remarkable turnaround in business confidence; well above what we might have hoped for, especially in the U.S. However, it is also clear that problems still remain to be addressed in parts of Europe and in Japan," says Buckle.
Across some of the key survey variables such as revenues, new orders, activity, profits and employment, the European countries within the survey under-perform the global average by between eight and twenty points. Across both manufacturing and services sectors, Italy and the UK tend to be the best performers, with the latter almost certainly benefitting from currency issues over its euro-zone neighbours.
The Japanese numbers are far less heartening - with half of their variables still in negative / pessimistic territory. Yet it could be argued that even this represents a minor triumph for a country still struggling with deflationary pressures.
Before the developed markets get too carried away with talk of their own revival, it is worth remembering that different economies have started this bounce back from very different points on the confidence scale. As the survey's historic data shows, many Western companies which rather limped through the past few years were already some way behind their emerging market competitors whose spirits held up more robustly during the depths of the downturn - and who now appear even more confident about the upturn.
According to Buckle, this may well have major ramifications for the East versus West challenge which characterised the run-up to the credit crisis. Before the recession, Western companies were facing an increasing competitive threat from the emerging economies. Two years later, their competitors already have their eyes firmly set on a growth agenda while Western businesses are only just beginning to recover. Therefore, the challenge of dealing with the competitive threat of the East has not gone away. In fact, it has been exacerbated, says Buckle.
"The developing markets appear to hold the aces; robust local demand, strong business and government balance sheets and of course the cost advantages. So while in isolation, these results are comforting to businesses globally, it is clear that the threat to the West's business supremacy has increased as a result of the last two traumatic years," remarks Buckle.