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NEW DELHI, Nov. 5

IF the gut feeling of top executives in this part of the globe is anything to go by, the world economic outlook over the next 12 months appears none too rosy. Significantly, senior executives in the Asia-Pacific region are more pessimistic on this count than their counterparts in North America or Europe.

According to the findings of a study released on Tuesday by Taylor Nelson Sofres (TNS), the market information company, in consultation with Deloitte Consulting, the proportion of senior executives in Asia-Pacific who believe that the `global economic conditions will improve' over the next 12 months has decreased by more than half (51 per cent) between the second and third quarter of 2002. This contrasts with a decrease of 15 per cent in the expectations of the executives in Europe over the same period and an increase of 10 per cent among the executives in North America.

The study involving over 600 CEOs, CFOs and other top executives from leading global companies found that 45 per cent of senior executives in the Asia-Pacific region believed `that global economic conditions would get worse over the next 12 months' compared with just two per cent who had felt this way in the second quarter and 16 per cent in the first quarter of the year.

Executives in Europe did not view the global economic outlook with such a strong degree of pessimism, although 19 per cent of those questioned still felt that conditions would worsen in the next 12 months compared with 11 per cent in the second quarter.

In contrast, just five per cent of the executives in North America anticipated a decline in the global economic climate, down from 10 per cent in the second quarter.

According to Mr John Smurthwaite, Chairman, TNS, Asia Pacific, "The `Global economic confidence barometer' reveals wide fluctuations in attitudes and confidence about the future performance of the world economy at a regional level, as well as across different market sectors. The study also demonstrates how quickly the views of senior business people can adapt to the uncertain conditions of the marketplace and this is particularly evident in these Q3 findings."

Mr Smurthwaite noted "as key influencers in economic growth, the views of those senior executives questioned, as part of the study, collectively represent a potential indicator of how the economy will perform. Building on each successive quarter, the economic confidence barometer provides a unique, progressive and continuous narrative that offers global insight into a highly sensitive and rapidly changing climate."

Coming to specifics, the study revealed that globally, respondents from companies with revenues of less than $1 billion were almost twice as likely to think that global economic conditions will get worse in the next 12 months compared with those from companies with revenues of $3 billion or more.

In addition, the confidence among those from companies with sales below $1 billion showed the most dramatic decline between the second and third quarter with an increase of 19 percentage points in the proportion of businesses predicting that global economic conditions will get worse.

Globally, the most pessimistic business sector was heavy industry with more than a third (37 per cent) of the respondents in the third quarter saying there would be deterioration in the economic climate over the next 12 months. None had agreed with this statement in the first and second quarter.

In contrast, just 12 per cent of the respondents from the financial services sector felt that economic conditions would worsen.

Interestingly, while CEOs and tax directors demonstrated the most significant decline in confidence since the first quarter at the global level, the heads of strategy and CIOs emerged as the most optimistic over the past three quarters.

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