Worldwide business confidence has fallen back to its financial crisis lows, with sharp declines in optimism in both the U.S. and China, according to an economic sentiment survey by Markit.
The report, which surveys around 11,000 global manufacturers and service providers, found that business optimism darkened in the first half of this year, dropping back to levels not seen in four years. The net balance of companies predicting rising business activity over the next twelve months fell to 30 percent in June, a low reached only twice before: in late 2009, and October 2012.
"The global economy is clearly in a soft-patch again, largely reflecting darker outlooks in the U.S. and China," said Chris Williamson, chief economist at Markit.
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"It calls into question the ability of the economy to continue generating jobs at anything like the pace seen in recent months," Williamson said. "Any thoughts of an imminent tapering of the Fed's stimulus are looking premature on this basis."
UK Exception
Among the world's largest developed economies, the U.K. was an exception to the gloomy picture, with optimism at its highest levels since the crisis. Notably, the U.K. service sector was at its most optimistic since Autumn 2006, while manufacturing sentiment held steady at a two-year high.
Markit's U.K. findings backed-up a raft of surveys that suggest the country is bucking the global trend when it comes to medium-term economic sentiment. A Lloyds TSB Commercial Banking Business survey, also released on Monday, showed business confidence at a five-year high, with expectations that orders, sales and profits would increase over the next six months.
Furthermore, a Deloitte survey of U.K. chief financial officers (CFOs), out last week, showed that business optimism had risen for the fourth consecutive quarter. An increasing number of CFOs said they believed it was the right time to take risk onto their balance sheets.
Among the BRIC nations, Brazil showed improved business confidence, according to the Markit survey, while sentiment in India and Russia remained steady. In Japan, the lift to business confidence from "Abenomics" was seen waning, although confidence remained high compared to the previous two years.