Over the past six weeks, executives have become markedly more optimistic about current economic conditions and prospects for their national economies, a new McKinsey survey shows.¹ Expectations started out so gloomy, however, that even now, fewer than a third expect an economic upturn this year, and two-thirds expect their nations’ GDPs to decrease in 2009.

Similarly, at the company level, more executives still expect to shed workers than to hire, but the share expecting to decrease the workforce has fallen below half for the first time since January. And a full third of respondents now expect profits to increase in 2009, up 8 percent in six weeks. Furthermore, even though respondents see fallout from the crisis in a variety of financial and nonfinancial measures such as employee morale and the pace of innovation, strong majorities expect those effects to be short-lived.