Global business confidence up for 2007 - Press Release

The initial findings from the International Business Report (IBR) from Grant Thornton International published today (10 January) show that medium to large privately held businesses around the world are considerably more optimistic about the prospects for their economies in 2007 - with an optimism/pessimism balance percentage (*see note below) of +45%, up from +39% last year. The survey, which covers the opinions of 7,200 business leaders in 32 countries, represents 81% of global GDP.

For the first time in its five year history the Grant Thornton International league table shows the EU (at a balance of +46%) is more optimistic than the US (at a balance of +14%). The findings reflect the growing confidence of EU economies in the past year, in particular Germany +66% (+41% in 2006), France +30% (+1% in 2006) and Italy +21% (-8% in 2006).

Asian business owners continue to be the most confident in the world, with India, the Philippines, Mainland China and Singapore taking the top four positions in the survey. India’s position at the top of the optimism/pessimism league table has strengthened to an unprecedented +97% up from +93% in 2006. Japan's figures reflect a steady economic recovery over the past five years from an optimism/pessimism balance of -71% in 2003 to just -5% in 2007.

Overall, the International Business Report shows businesses in 29 out of 32 countries are optimistic about their economy’s performance in 2007 with 24 being more optimistic than last year. By contrast, Turkey has shown a massive drop in optimism in the past year from +58% to 0%, probably reflecting frustrations it has faced in its negotiations to join the EU.

Alex MacBeath, global leader of privately held business services for Grant Thornton International, said: “For the first time in five years the findings of our survey don't appear to be influenced by extraordinary global events such as terrorism, natural disasters or potential health scares. The rise in EU confidence is drawn both from the economic growth in the past year and economic reforms, particularly in Germany and Italy.

“In comparison, the US has faced a period of slowing economic growth and political instability. The congressional elections in November, a change in control of the Senate, gloomy housing figures and a growing backlash against the Iraq war appear to be leading to a more cautious outlook for business in 2007.”

Alex MacBeath, Director of privately held business services for Grant Thornton International, said: “For the first time in five years the findings of our survey don't appear to be influenced by extraordinary global events such as terrorism, natural disasters or potential health scares. The rise in EU confidence is drawn both from the economic growth in the past year and economic reforms, particularly in Germany and Italy.

The positive outlook for the global economy is also reflected in business owner attitudes towards expected growth in turnover for their businesses in 2007, with a balance of +69%. Interestingly on this indicator, the EU at +57% falls behind the US at +77%. However, India leads the way in expectations of growth in turnover with a balance of +90%.

Alex MacBeath continued: “The findings from the International Business Report show a rebalancing of the global economy with increasing optimism in Europe and a more pessimistic outlook from US business owners. However, their level of confidence cannot match the emerging economies, especially India and Mainland China.”

Ends

*The figure is the percentage balance of the respondents who are optimistic less those who are pessimistic. The highest possible figure countries are able to record is +100% and the lowest is -100%.

Notes to editors

Grant Thornton International started a major annual survey of the attitudes and expectations of small and medium-sized businesses in 1992 called the European Business Survey (EBS). In 2003 the research project was widened to an international perspective covering medium-sized businesses and renamed the International Business Owners Survey (IBOS).

In 2007, the survey’s name was changed from IBOS to the International Business Report (IBR). The IBR survey draws upon 15 years of trend data for original EBS participants and 5 years for original IBOS countries. 15 year trend data is available for: France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Spain, Sweden, Turkey and the UK, while 5 year trend data is available for Australia, Canada, Hong Kong, India, Japan, Mexico, Singapore, South Africa and the US.

Grant Thornton International will donate US$5 to UNICEF for every completed IBR questionnaire. In 2007 this will result in a donation of over US$35,000.

The research was conducted by Experian Business Strategies Limited and Harris Interactive. All figures were correct at time of going to press.

About Grant Thornton International

Grant Thornton International is one of the world's leading organisations of independently owned and managed accounting and consulting firms providing assurance, tax and specialist business advice to privately held businesses and public interest entities. The strength of each local firm is reflected in the quality of the international organisation. All Grant Thornton International member firms share a commitment to providing the same high quality service to their clients wherever they choose to do business.

Grant Thornton International is a non-practising international umbrella organisation and does not deliver services in its own name or otherwise. Each member and correspondent firm in Grant Thornton International is a separate national firm. These firms are not members of one international partnership or otherwise legal partners with each other (with the exception of certain limited instances), nor is any one firm responsible for the services or activities of any other.

For further information please contact:

Nan Williams, Paul Donlon or Greg Moore,
Grant Thornton International Press Office.
Tel: 44 (0)870 420 3256 / 07774 741 518 or gti@fourcommunications.com

Neil Bird
IBR project manager
Grant Thornton International
Tel: 44 (0)870 991 2706