Executives are markedly less optimistic than they were a year ago, according to McKinsey's latest survey of executives from around the world. Although The McKinsey Global Confidence Index1 shows that more executives than not are still confident about the economic prospects of their industries and countries and of the world as a whole, the index has fallen by 12 percent since January 2004, and executives in developed Asian countries are the least confident of all.
The McKinsey findings, based on the responses of some 16,500 businesspeople from 148 countries, confirm a spate of bad economic news. The weak dollar, volatile oil prices, and geopolitical uncertainty seem to have depressed economic prospects around the world; a respected US consumer confidence survey fell to an eight-month low in November, for example, and in early December the Organisation for Economic Co-operation and Development forecast that in 2005 economic growth would be 10 percent lower in the United States and 24 percent lower in the euro zone than it had predicted just six months earlier.
Since much of the world's economic growth depends on international trade, the McKinsey survey's findings on trade liberalization are cautionary. The survey began on the day when the...