Executives in Japan and South Korea are losing confidence in the short-term prospects of their respective countries and industries, according to the latest McKinsey Quarterly survey of global executives.
The research revealed that respondents from this region are the least confident about the economic prospects of their countries during the next six months and have lost the most confidence overall since January 2004.
Several countries in the Asia-Pacific region’s developed nations face slowing economic growth, as well as increasing competition from both China and India.
Overall, the participants in the Quarterly Survey held a positive view of the economic prospects of their countries and industries, but a significantly less positive view than they had a year ago.
Global confidence was shown to have fallen by 11% since January 2004, with the slide consistent with a recent World Bank report concluding that the global recovery has peaked.
The survey claimed that executives in India were the most confident about their prospects, with 80% saying their country’s economy is better than it was six months ago. The same proportion believe it will improve further in the next 6 months, while 74% also expect conditions in their own industry to improve in that time.
Consumer products, high tech, and telecommunications are predicted as the industries with most growth potential over the next five years.
Executives in developing countries were shown to be the most upbeat respondents, with their optimism supported by a recent report from the Asian Development bank, which predicts that Asia’s emerging economies will enjoy robust growth in 2007 on the back of strong domestic demand, regional trade and a steady influx of investment.
IT and telecom executives were the most positive about improvements to their industries, while consumer products executives were the least hopeful.
The survey showed that new jobs would be most scarce in heavy industry, while nearly half of the IT and telecom executives plan to expand the workforce.
New telecom jobs are expected to be concentrated in India and North America, with executives in India predicted to be more likely to hire more employees, with nearly two-thirds saying they have plans to do so.
The latest forecasts for the Asia-Pacific region from ZenithOpimedia predict advertising expenditure for major media to end 2005 at $75,052 million, rising to $85,834 million by 2007 (see Advertising Market Forecast To Remain Solid).
Global advertising expenditure is estimated to enjoy growth of 5.4% in 2005, up from previous estimates of 5.0%, while 2006 is expected to rise up 6.5%, compared to ZenithOptimedia’s earlier forecast of 5.8%. Estimations for adspend growth in 2007 are not as optimistic, at 6.1%, revised upwards from 5.8%.
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