U.S. executives are expressing stronger optimism for improved business activity over the next 12 months compared to their European counterparts, according to a new poll by KPMG.
U.S. manufacturing executives continued to show the strongest sentiment among 6,200 respondents worldwide, with 73 percent expecting improved business activity over the next 12 months, compared with 71 percent in February and 65 percent last October.
Meanwhile, among U.S. service industry executives, 65 percent of survey respondents expected higher business activity in the period, compared with 63 percent in February, and 70 percent in October.
“Expectations for greater business activity moved up again among U.S executives, which is encouraging, but the slight drop in the European Union is likely a sign that market uncertainties continue to moderate global expansion,” said Mark A. Goodburn, vice chairman and head of advisory for KPMG LLP. “U.S. executives are seeing signs of an increase in business activity, prompting anticipation for stronger revenue flow, profitability and hiring in the coming months.”
U.S. manufacturing executives anticipate a significant rise in higher employment in the next 12 months, from 34 percent in February to more than 45 percent in the current survey. However, 40 percent said it would remain unchanged, and less than 5 percent said it would be lower, compared with more than 6 percent in February and as much as 12 percent expecting lower employment back in October.
Seventy percent of manufacturing executive respondents expect business revenue to rise in the coming 12-month period, up from 67 percent in February and from 62 percent in October; just 3 percent said revenues would be lower, down by half from the February figure of 6 percent, and 12 percent in the October polling.
Almost 67 percent of U.S. manufacturing executives expected higher profits in the coming 12 months, up from 63 percent in February and 60 percent last October; just 3 percent expect lower profits, down from 6 percent in February and 14 percent in October.
Sixty-five percent of service sector executives expect higher activity in the coming 12 months, up from 63 percent in February yet still short of the 70 percent that expected higher activity last October; 31 percent said activity would be the same in the coming period, a slight uptick from the 30 percent mark in February; 3 percent who said activity would be lower was unchanged from February.
Globally, 53 percent of service executives expected improvement, unchanged from February. Just 49 percent of EU executives in the services sector expected higher activity, down from 53 percent in February, while just 51 percent of BRIC countries’ executives anticipated a rise in activity, down markedly from 62 percent in the previous survey.
The percentage of U.S. service sector respondents who expected higher employment in the coming year continued to rise slightly to 34 percent in the current survey, up from 33 percent in February, and from 32 percent October; and 58 percent of the current respondents said the employment picture would not change in the next 12 months, compared with 59 percent in February and 62 percent in October.
Sixty-four percent of service sector executives expected revenue to be higher compared in the coming period compared with 61 percent in February, but still not as bullish as October, when 69 percent of respondents expected higher revenues in the coming year.
Thirty-one percent expected revenue to be the same in the next 12 months, up slightly from 30 percent in February and still higher than the nearly 26 percent in the October survey.
Sixty-one percent of service sector respondents expected a rise in profit, compared with 60 percent in February; those expecting lower profits remain unchanged at 5 percent; and 31 percent expected profits to be the same for the period, up from 27 percent in February.