Confidence among the managers of the world’s largest companies has reached its highest level since 2014, turning from negative last year to positive in 2017, research suggests.
A survey of 146 equity and fixed-income analysts found management confidence has improved markedly since 2016 when there was a decline in confidence globally.
The survey, conducted by Fidelity International, concluded that chief executives now regard demand-led growth as the main driver of earnings growth for their companies, whereas last year they were looking to implement cost efficiencies.
Fidelity said that all regions of the world scored positively on the sentiment indicator, showing that “corporate conditions are strengthening everywhere”.
The biggest improvement was seen in Eastern Europe, Middle East, Africa and Latin America, where the score moved from 2.7 to 6.4. In China the indicator recovered to a level last seen in 2014.
Also striking was the swing in sentiment in developed Western economies – particularly in the energy and materials sectors, which scored poorly last year.
Martin Dropkin, fixed income research director at Fidelity International, said: “With the oil price lows now behind us, oil-price sensitive sectors and regions are bouncing back strongly from last year’s lows.
“This, combined with evidence of modest demand growth and continued innovation across sectors, is driving higher levels of investment and activity, which has also been reflected in firmer macroeconomic data.”
©2017 funds europe
