ATLANTA, July 11, 2013 (GLOBE NEWSWIRE) -- The global economic outlook is strong for the second half of 2013, while the prospects for corporate growth and expansion are also increasing, according to the views of corporate executives surveyed in June for the new CoreNet Global Confidence Index, developed in conjunction with Dr. Roy Black, Director of the Real Estate program at Emory University's Goizueta Business School in Atlanta.
The index is a new macro-economic measure based on the viewpoints of corporate real estate (CRE) executives serving large, multinational companies from multiple industry sectors. The first index rating is 4.65, based on a scale of 7 with 7 representing an extremely optimistic environment. Professor Black, who led the design of the Confidence Index model, characterized its first outcome as "a classic case of corporate economic resiliency following the challenging overhang of 2009."
According to the predictive survey, nearly two-thirds (62.5 percent) rated their outlook on the global economy for the coming six months as optimistic to very optimistic, compared to a year ago. Almost one-third (31.3 percent) were neutral on the question, with only incremental pessimism registered (4.2 percent).
By contrast, the World Gross Product measure of all economic growth globally shows a flat-line trend of +2.3 percent from last year to this year. It also projects an increase to +3.1 for 2014, making the CoreNet Global index trend a possible harbinger of future growth. In a similar way, a July 9 International Monetary Fund report cited by CNN characterized the global economy as "stuck in neutral."
Still, executives in the CoreNet Global survey ascribed even higher confidence levels to the likelihood of their companies' growth for the second half of 2013. A strong majority rated their confidence levels in the prospects for business expansion as optimistic (54.2 percent), very optimistic (14.6 percent), and extremely optimistic (4.2 percent). One-fifth (20.8 percent) were neutral on the question, while less than a tenth (6.3 percent) expressed pessimism.
Moody's Analytics' chief economist recently offered supporting evidence by pointing to the strength of the private sector as the main driver of otherwise sluggish growth. "The (US) private sector is now in a strong growth mode of 3.5 percentage points of GDP. Consumers and business are doing their part to support the recovery," Mark Zandi told Globe Street on July 9.
Internal corporate business factors relating directly to the size, cost and location of massive real estate and workplace portfolios provide the basis for the rating of confidence levels of the executives who directly influence the growth and contraction of corporate property holdings.
"As a leading professional association for CRE executives, CoreNet Global is projecting the demand for office, industrial and other types of corporate real estate and correlating those internal business conditions to prospects for economic and business growth that, in turn, have direct impact on the wider economy," said CoreNet Global CEO Angela Cain.
Key findings of the first CRE confidence measure include:
- As part of the trend reflected by the index, almost three quarters (72.4 percent) indicated that market entry, new products, mergers and acquisitions, and on-shoring will drive growth. Opportunities to improve cost performance by relocating are also viewed as likely growth drivers by over half of the executives responding (52.4 percent).
- Most companies (72.4 percent) reported the likelihood that flexible, open workplace strategies will increase while space per work setting and/or work settings per supported worker will be reduced. A related driver shows that a move to higher-quality work spaces could occur (40.4 percent) because of poor-quality spaces that do not support contemporary work practices.
- The availability of capital to fund real estate portfolio growth is not regarded as a limiting factor with almost two-thirds (62.6 percent) expecting sufficient levels of financial capacity and affordability for changing the size of the portfolio.
- Many CRE executives (62.5 percent) have increased the flexibility of their lease-hold strategies, saying it's unlikely that tenure constraints will prevent changes. One outcome is they now have the ability to trade off under-performing assets for more productive facilities on an on-demand basis.
- Respondents also identified two limiting factors. One is surplus space, with half (50 percent) indicating some degree of misalignment between employment levels, unoccupied space and the growth rate of the company. Another limiting factor is continuing cost management pressure (35.5 percent).
The index methodology is informed quarterly by the direct polling of nearly 90 CoreNet Global Corporate Partners, comprised of an economically-diverse mix of multinational companies representing the following sectors: aircraft and aerospace; automotive; business services and consulting; consumer goods; distribution and logistics; education; energy; petroleum and mining; financial services; government; health care; hospitality and entertainment; insurance; life sciences and pharmaceuticals; manufacturing and industrial; media; real estate; retail; software; technology; telecommunications; transportation and utilities.
Corporate Partners manage real estate portfolios that typically range between 2-million square feet and 110-million square feet globally. The types of real estate managed are office space (84.8 percent of total average portfolio), industrial (34.8 percent), laboratories (32.6%); research and development (32.6 percent), data centers (39.1 percent), retail (26.1 percent), other including mixed use development (19.6 percent).
A graph accompanying this release is available at http://media.globenewswire.com/cache/24014/file/20826.pdf
A list of CoreNet Global Corporate Partners is available via: http://www.corenetglobal.org/Sponsorship/content.cfm?ItemNumber=12755
CoreNet Global (www.corenetglobal.org) is the world's leading professional association for corporate real estate and workplace executives, service providers, and economic developers.
CONTACT: David Harrison +1.410.804.1728 email@example.comSource: CoreNet Global