From gloom to boom? New research points to economic turnaround worldwide

• India, Australia and the US most optimistic about the economy as Eurozonecountries struggle
• Mixed signals from Asia as region recovers from SARS

The first findings of the annual Grant Thornton International BusinessOwners Survey (IBOS), published today, show a significant swing to optimismabout the economy among business owners in 26 countries across the world. Indiatops the league table in being the most optimistic country with anoptimism/pessimism balance (*see note below) of +83%, perhaps reflecting thecurrent buoyant industrial performance and a good monsoon season. Followingclose behind is Australia (+81%), where the economy continues to be on aneconomic roll, and the US (+75%). This reflects the spectacular performance ofthe US economy with annualised 2003 third quarter growth of more than 7% at thetime of the survey - the strongest for 20 years. South Africa and Canada followclosely behind.

Although more optimistic than last year, Eurozone countries are much slower inanticipating a recovery. Five out of seven Eurozone countries in the survey -Germany, France, Netherlands, Italy and Ireland - are in the top ten mostpessimistic countries in the world. Germany is the most pessimistic with anoptimism/pessimism balance of -6%. Two non-Eurozone countries, the UK andSweden, are optimistic, with balances of +49% and +24% respectively. The UK andSpain, which also has a balance of +49%, are the most optimistic Europeancountries.

Structural economic problems have kept Japan at the bottom of the table for thesecond year running with a balance of -46%, although this is significantly moreoptimistic that last year's balance of -71%. The picture across Asia, however,is mixed. There has been a dramatic swing to optimism in Hong Kong - from abalance of -30% last year to +51% - perhaps indicating that the economy may beturning the corner. Pakistan, Indonesia and Taiwan are also positive but thePhilippines and Singapore remain pessimistic. Singapore is the only country inthe survey to become more pessimistic this year and, unlike Hong Kong, appearsto have been unable to shake off the repercussions of SARS.

Said Michael Rogerson: "Overall the results paint a much better economicpicture than this time last year with an optimism balance of +39% compared to+3% twelve months ago. The global economy appears to be firmly on a recoverypath, led by a strong economy in the US. While Europe is also more positive,business owners remain more cautious and lag far behind the US.

"If you are doing business in Asia, the survey strikes a note of caution.It is critical to understand the differences between the individual countriesand the region cannot be treated as an homogenous block."

Business owners were also asked about their expectations for their owncompanies:

The first findings of the annual Grant Thornton International BusinessOwners Survey (IBOS), published today, show a significant swing to optimismabout the economy among business owners in 26 countries across the world. Indiatops the league table in being the most optimistic country with anoptimism/pessimism balance (*see note below) of +83%, perhaps reflecting thecurrent buoyant industrial performance and a good monsoon season. Followingclose behind is Australia (+81%), where the economy continues to be on aneconomic roll, and the US (+75%). This reflects the spectacular performance ofthe US economy with annualised 2003 third quarter growth of more than 7% at thetime of the survey - the strongest for 20 years. South Africa and Canada followclosely behind.Although more optimistic than last year, Eurozone countries are much slower inanticipating a recovery. Five out of seven Eurozone countries in the survey -Germany, France, Netherlands, Italy and Ireland - are in the top ten mostpessimistic countries in the world. Germany is the most pessimistic with anoptimism/pessimism balance of -6%. Two non-Eurozone countries, the UK andSweden, are optimistic, with balances of +49% and +24% respectively. The UK andSpain, which also has a balance of +49%, are the most optimistic Europeancountries.Structural economic problems have kept Japan at the bottom of the table for thesecond year running with a balance of -46%, although this is significantly moreoptimistic that last year's balance of -71%. The picture across Asia, however,is mixed. There has been a dramatic swing to optimism in Hong Kong - from abalance of -30% last year to +51% - perhaps indicating that the economy may beturning the corner. Pakistan, Indonesia and Taiwan are also positive but thePhilippines and Singapore remain pessimistic. Singapore is the only country inthe survey to become more pessimistic this year and, unlike Hong Kong, appearsto have been unable to shake off the repercussions of SARS.Said Michael Rogerson: "Overall the results paint a much better economicpicture than this time last year with an optimism balance of +39% compared to+3% twelve months ago. The global economy appears to be firmly on a recoverypath, led by a strong economy in the US. While Europe is also more positive,business owners remain more cautious and lag far behind the US."If you are doing business in Asia, the survey strikes a note of caution.It is critical to understand the differences between the individual countriesand the region cannot be treated as an homogenous block."Business owners were also asked about their expectations for their owncompanies:

• Prospects for employment have improved in most countries in line with theexpected upswing in economic activity. Pakistan (+48%), US (+45%), Australia(+41%) and Turkey (+40%) have the strongest expectations for employment. Germanyand Poland (both -16%) are the most pessimistic.
• There is a wide expectation that profitability will rise. This is typical ofthis phase of the economic cycle. Japan is the major exception with expectationof profitability even more negative than last year with a balance of -15%compared with 0%.
• The business owners who are most pessimistic about selling prices all comefrom Asia - Japan (-50%), Singapore (-39%), Taiwan (-30%) and Hong Kong (-26%).Russia is the most optimistic with a balance of +59%.

Notes to editors

The Grant Thornton International Business Owners Survey (IBOS) was carried outamong 6600 owners of medium sized businesses from 26 countries between 1September and 31 October 2003. IBOS began in 2002 and builds on the EuropeanBusiness Survey (EBS) which Grant Thornton ran for the previous ten years. Theresearch was conducted by Experian Business Strategies Limited and WirthlinWorldwide.

* the figure is the percentage balance of the respondents who are optimistic andthose who are pessimistic