Mid-market business leaders appear to be hedging their bets following a year of record political change around the world, most recently with a new administration in the United States. While a record 76% are optimistic about the outlook for their economy over the next 12 months (up two points from Q3 2024), concerns over economic uncertainty also rose four points to 56%, according to Grant Thornton's latest International Business Report (IBR).
The results may reflect both the hopes and concerns around the impact of future US policies on the global economy, along with the shifting market dynamics businesses are navigating following elections in over 64 countries this year.
Regional variations serve to underline nuanced economic sentiment across the mid-market globally. Pre-election optimism in the US saw 88% of mid-market business leaders say they were optimistic about the outlook for their economy (up five points). The Asia-Pacific region saw optimism rising slightly to 74% (up two points), while other regions paint a more subdued picture. European mid-market confidence has dipped to 61% (down two points), while Africa experienced a more significant ten-point decline to 68%, South America saw a marginal one-point reduction to 75%.
The nuanced outlook is reflected in fewer business leaders expecting increased profitability over the next 12 months (down three points to 64%). Fewer mid-market businesses are also expecting revenues to grow (down one point to 64%). With global inflation mostly under control, fewer business leaders expect to increase selling prices (down one point to 53%).
Despite these challenges, international business remains a leading focus with a record number of businesses expecting to increase exports, up three points to 55%. Additionally, a record 52% anticipate expanding the number of countries they sell to (up two points), while 44% expect to increase the number of employees focused on non-domestic markets (up four points).
Marginally fewer business leaders expect to increase revenues from non-domestic markets (down one point to 50%), highlighting the cost of international expansion can take time to impact revenues.
The uncertain political landscape explains why business constraints increased across the board with economic uncertainty remaining the top concern for 56% of business leaders, rising four points compared to last quarter.
After a decline in the previous quarter, concerns over energy costs are now resurging, climbing five points to 55%. This is followed by those citing the availability of skilled workers as a concern, up six points to 53% and concerns over labour costs rising four points to 53%.
Equally concerns over competition increased, jumping to 52% (up three points), while concerns over cybersecurity is also up three points at 52%.
Information technology remains the number one investment choice of business leaders, with 69% planning to increase spending (down one point). AI remains the most significant investment segment within technology, accounting for 59% of planned technology investments, though experiencing a seven-point decline from the previous quarter.
Research and development remained high, with a record 62% of respondents expecting to increase investment (up one point). This is closely followed by investment in people, with a record 61% of business leaders planning workforce increases (up one point).
Investment in brand has emerged as a strategic priority with a record 61% of business leaders planning increases, a two-point uptick that signals growing recognition of brand value. A focus on sustainable initiatives has also gained momentum, with a record 60% of leaders intending to boost investment in this area.
Investment in new buildings and plant and machinery saw a marginal increase to a record 54% (up one point), while investment in workplaces is up one point to a record 53%.
Peter Bodin, CEO of Grant Thornton International Limited commented:
“Our latest IBR research reveals a complex global economic landscape, with mid-market optimism surprisingly resilient. While optimism varies regionally, with geopolitical and economic challenges evident in Europe and Africa, there continues to be significant momentum in international expansion, along with plans to invest in AI and sustainability.
The data suggests that mid-market businesses globally are waiting for clarity on the new US administration’s macroeconomic policies, which helps explain why the mid-market’s optimistic outlook is tempered by its very real concerns over economic uncertainty.
Our message is clear: amid uncertainty, informed and strategic action will define success. Deliver exceptionally on the basics and be prepared for wider macroeconomic change”
Press Release
Mid-market optimism tempered by concerns over economic uncertainty
03 Dec 2024
Mid-market business leaders appear to be hedging their bets following a year of record political change around the world, most recently with a new administration in the United States. While a record 76% are optimistic about the outlook for their economy over the next 12 months (up two points from Q3 2024), concerns over economic uncertainty also rose four points to 56%, according to Grant Thornton's latest International Business Report (IBR).
The results may reflect both the hopes and concerns around the impact of future US policies on the global economy, along with the shifting market dynamics businesses are navigating following elections in over 64 countries this year.
Regional variations serve to underline nuanced economic sentiment across the mid-market globally. Pre-election optimism in the US saw 88% of mid-market business leaders say they were optimistic about the outlook for their economy (up five points). The Asia-Pacific region saw optimism rising slightly to 74% (up two points), while other regions paint a more subdued picture. European mid-market confidence has dipped to 61% (down two points), while Africa experienced a more significant ten-point decline to 68%, South America saw a marginal one-point reduction to 75%.
The nuanced outlook is reflected in fewer business leaders expecting increased profitability over the next 12 months (down three points to 64%). Fewer mid-market businesses are also expecting revenues to grow (down one point to 64%). With global inflation mostly under control, fewer business leaders expect to increase selling prices (down one point to 53%).
Despite these challenges, international business remains a leading focus with a record number of businesses expecting to increase exports, up three points to 55%. Additionally, a record 52% anticipate expanding the number of countries they sell to (up two points), while 44% expect to increase the number of employees focused on non-domestic markets (up four points).
Marginally fewer business leaders expect to increase revenues from non-domestic markets (down one point to 50%), highlighting the cost of international expansion can take time to impact revenues.
Business constraints
The uncertain political landscape explains why business constraints increased across the board with economic uncertainty remaining the top concern for 56% of business leaders, rising four points compared to last quarter.
After a decline in the previous quarter, concerns over energy costs are now resurging, climbing five points to 55%. This is followed by those citing the availability of skilled workers as a concern, up six points to 53% and concerns over labour costs rising four points to 53%.
Equally concerns over competition increased, jumping to 52% (up three points), while concerns over cybersecurity is also up three points at 52%.
Investment intentions
Information technology remains the number one investment choice of business leaders, with 69% planning to increase spending (down one point). AI remains the most significant investment segment within technology, accounting for 59% of planned technology investments, though experiencing a seven-point decline from the previous quarter.
Research and development remained high, with a record 62% of respondents expecting to increase investment (up one point). This is closely followed by investment in people, with a record 61% of business leaders planning workforce increases (up one point).
Investment in brand has emerged as a strategic priority with a record 61% of business leaders planning increases, a two-point uptick that signals growing recognition of brand value. A focus on sustainable initiatives has also gained momentum, with a record 60% of leaders intending to boost investment in this area.
Investment in new buildings and plant and machinery saw a marginal increase to a record 54% (up one point), while investment in workplaces is up one point to a record 53%.
Peter Bodin, CEO of Grant Thornton International Limited commented:
“Our latest IBR research reveals a complex global economic landscape, with mid-market optimism surprisingly resilient. While optimism varies regionally, with geopolitical and economic challenges evident in Europe and Africa, there continues to be significant momentum in international expansion, along with plans to invest in AI and sustainability.
The data suggests that mid-market businesses globally are waiting for clarity on the new US administration’s macroeconomic policies, which helps explain why the mid-market’s optimistic outlook is tempered by its very real concerns over economic uncertainty.
Our message is clear: amid uncertainty, informed and strategic action will define success. Deliver exceptionally on the basics and be prepared for wider macroeconomic change”