Global Economic Recovery Might Take Up to 3 Years, Say European Bosses
Date: Tuesday, May 19, 2020
Source: The Wall Street Journal
Business leaders surveyed by Conference Board hold ‘overwhelmingly pessimistic’ view of near-term prospects amid coronavirus pandemic
A global economic recovery from the coronavirus crisis will take between one and three years, more than 80% of top European business leaders said in a survey to be released Tuesday.
The views of chief executives and chairmen in the European Round Table for Industry, a trade group, were overwhelmingly pessimistic about near-term prospects and mirror the grim outlook of American chief executives in a similar recent survey. Both surveys were conducted by the Conference Board, a U.S. business think tank.
Among European business leaders, 53% expect the global economy will need between one and two years to recover, and another 39% predict the recovery will take between two and three years.
Business chiefs on both sides of the Atlantic rated their current confidence in the economy at a level of 34 on a scale of zero to 100, with expectations for the coming six months ranging between 48 and 50 for the economy overall and respondents’ own industries. Readings below 50 indicate pessimism in the Conference Board’s confidence measure.
Comparing current business conditions to those six months ago, both U.S. and European executives gave grades of only three out of 100, “an extraordinarily low measure,” the two business groups said in a report on the survey.
“Business leaders almost unanimously provided the most negative assessment possible on present business conditions” because of the sudden plunge in economic activity, Conference Board Chief Economist Bart van Ark said of the European survey.
The survey of the European round table’s 56 members was conducted in the middle of April. The U.S. survey was taken from the end of March to early April.
Top cost-cutting measures being taken by European companies include postponing planned investments, cutting travel and freezing recruitment. Almost one in three companies said it had temporarily closed plants or distribution centers. The business leaders ranked issuing new debt and drawing down lines of credit as the best measures to steady finances.
The European Round Table includes many of the continent’s biggest companies, including car makers BMW AG , Daimler AG and Renault, chemicals giant BASF SE, tech companies Nokia Corp., LM Ericsson, Vodafone Group PLC and Orange SA, and consumer companies including Heineken NV, Barilla Group and Nestlé SA .