Manufacturers in Brazil and US are more hopeful


By Jack Hagel

Global business leaders – particularly those in the US and Brazil – are increasingly optimistic, due in part to improved global economic conditions and forecasted growth over the next 12 months. Companies are planning for more investment and increased staffing – an about-face from four months ago, according to KPMG research.

Growth expectations in manufacturing and the service sector are still below what they were a year ago, but they have rebounded considerably in the past four months, according to the spring 2012 edition of “Pulse: The KPMG Global Business Outlook Survey”, which was released last week.

Expectations for growth during the next 12 months increased among manufacturers surveyed in February. About 53% of respondents expect growth versus about 12% that expect a decline, according to the survey, which polls about 11,000 manufacturers and service providers on future business conditions. In the October survey, about  42% of manufacturers anticipated growth, while 15% expected a decline.

“It would seem that the dark cloud expressed at the close of last year has lifted,” Mark A. Goodburn, global head of advisory for KPMG International, said in a prepared statement. “While the euro-zone crisis is far from over, globally, businesses feel as though it is at least under control.”

Strong gains in the US economy have bolstered positive sentiment, he added.

That echoes sentiment found in the CGMA Global Economic Index.

According to the KPMG survey, US companies are planning the biggest hiring increases, followed by those in fast-developing countries such as Brazil, Russia, India and China. Company investment increases are also projected to be strongest in the so-called BRIC region.

Brazilian manufacturers, in particular, stood out in the most recent survey, which was produced by Markit Economics on behalf of KPMG.

“While the strong domestic market has helped [Brazil] weather the storm,” Goodburn said, “anticipated increase in demand from key export markets in the coming months has clearly buoyed confidence beyond what we saw late last year.”

Brazilian manufacturers expect to invest more in R&D, and they’re anticipating a hiring surge. Employment-growth forecasts among Brazilian manufacturers were second-highest among all monitored countries in the survey.

Europe’s mood has brightened following policy to contain the region’s debt crisis, according to the survey. Companies in Germany and the UK are increasingly optimistic. Greece, however, continues to worry about the future.

Jack Hagel (jhagel@aicpa.org) is the editorial director of CGMA Magazine.

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