Executives less confident about their economies

Compared with three months ago, smaller share of executives say their economies improved over the past six months, and slightly more expect worsening conditions over the rest of 2011, according to responses from 1720 executives representing the full range of regions, industries, company sizes, and functional specialties. However, executives seem to be more intently focused on economic fundamentals and are far less worried about geopolitical instability damaging the economy than they were in March.

Notably, the share of executives in Europe who see improvement has fallen very little compared with the drops among those in North America and the developed countries of Asia Pacific even though the eurozone has been under much-publicised pressure because of Greece’s financial problems. Indeed, 57 percent of all respondents say it’s at least somewhat likely that the eurozone will splinter within the next two years.

More pessimism about economic conditions has not, however, spread to executives’ expectations for their companies. On the whole, expectations for hiring, profit, and customer demand remain positive and stable compared with three and six months ago.

• For more on the survey visit www.mckinseyquarterly.com

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