Economic confidence high in Latin America and up for EU states Go compare with our comparison table

Economic confidence high in Latin America and up for EU states

10 January 2011 / by Paul Dicken

Business optimism in the majority of EU’s largest member states is registering positive, while an international survey in 39 countries shows confidence on a high in Latin America.

The latest European Union Commission’s economic sentiment indicator showed just Spain of the seven largest states was registering a decrease in confidence about the outlook, while France registered the most significant increase.

Netherlands, Germany and Poland also showed positive sentiment about business activity, while the indicator was also up for Italy and the UK but at lower levels.

Confidence amongst consumers is lower with negative scores in the euro area and the EU as a whole.

The EU Commission said: “The drop in confidence mirrored in particular a significant worsening of consumers’ assessment of the general economic situation and a rise in unemployment fears.”

Published on 5 January, the Grant Thornton International Business Report (IBR) showed higher levels of confidence in economic performance going into 2011 in Latin America than another other global region.

The first year Latin America has led the IBR rankings, a balance of +75 per cent of privately held business owners are optimistic about the area’s economy in 2011. In the Asia Pacific region, excluding Japan, confidence was at +50 per cent, in North America at +26 per cent and Europe +22 per cent.

Chief executive officer at Grant Thornton, Ed Nusbaum, said: “In recent years the focus for emerging economies has been on the BRIC economies of Brazil, Russia, India and China. However, Latin America has come a long way.

“The region as a whole is expected to see GDP growth of around 4% in 2011 and if the current business confidence translates to widespread, sustained growth, the next decade could see Latin America truly realize its potential.”

Nusbaum said the growth of Brazil had made a big impact on its neighbours, while there was a knock on effect from Brazil winning the 2014 World Cup and 2016 Olympics.

The sovereign debt crises in the Eurozone has had an impact on business confidence in Ireland, Spain and Greece with negative ratings in the IBR.

“This year’s report tells a concerning tale of two Europes. Diverging levels of business confidence across the region will put increasing strain on a Eurozone that has had a turbulent 2010,” Nusbaum said.

Internationally, business expect weak investment in 2011, with 35 per cent of businesses expecting increased investment in plant and machinery and 24 per cent expect increases in research and development investment.  The exception to this trend was China, where higher numbers of business predict investment increases.

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