Businesses Show Growing Optimism Amid Global Challenges: Report

Dun & Bradstreet releases its Q3 2024 Global Business Optimism Insights report. The latest quarterly report shows increased optimism across all five indices.

Adobe Stock 483111471

Dun & Bradstreet releases its Q3 2024 Global Business Optimism Insights report. The latest quarterly report shows increased optimism across all five indices – business, supply chain continuity, financial and investment conditions, and ESG initiatives - for the first time since the launch of the report in Q3 2023.

Worldwide, businesses have rallied against persistent geopolitical tensions and supply chain disruptions, with global business optimism and financial confidence rising by more than 12%. Additionally, the steps taken by most central banks towards easing interest rates have bolstered optimism, with global financial confidence increasing more than 23%. Driven by improved macroeconomic conditions, businesses are notably optimistic about sales and new orders, while financial and investment confidence has surged due to expectations of favorable operating conditions and reduced borrowing costs.

“The improved optimism among businesses demonstrates resilience in navigating global disturbances by adapting to the ‘new normal’ and leveraging emerging opportunities,” says Neeraj Sahai, president of Dun & Bradstreet International. “Surge in investment confidence among businesses indicates higher capital requirements and a more buoyant M&A environment for inorganic growth. As we look with an eye toward the next quarter, it should be with cautious optimism, as policy uncertainty associated with upcoming elections globally persists.”

Regionally, business optimism in the U.S. showed a notable recovery, rising by nearly 17% for Q3. This was reinforced by service-oriented businesses, particularly within the information and communications technology (ICT) sector where optimism increased by 51%. Germany witnessed a nearly 10% increase, supporting the overall European economic sentiment. The Asia-Pacific region also saw prominent increases particularly in Indonesia (20%) and Japan (22%). Conversely, the U.K. saw a nearly 4% decline in business optimism.

Key Takeaways:

  • The Global Business Optimism Index increased 12.3% on the back of expected growth in sales, new orders, and favorable input costs amid easing global inflation. The increase in optimism is in sync with the latest upward revisions in global GDP forecast for 2024 by multilateral agencies. Globally, ICT, Wholesale & retail, and textile are the most optimistic sectors.
  • The Global Supply Chain Continuity Index saw a marginal improvement of 1.2% stemming from businesses adjusting to the new supply chain environment, which continues to be disturbed by geopolitical tensions, longer shipping routes and climate-related disruptions. Large businesses’ optimism deteriorated significantly reflecting the challenges of an interconnected global supply chain. However, smaller businesses are more optimistic as they expect to reduce their supplier concentration risk.   
  • The Global Business Financial Confidence Index improved 12.3% as businesses are optimistic about their operating conditions and liquidity risk.  Smaller businesses, that may previously have been relatively constrained in their approach to liquidity risk management, are now more optimistic about cash flow management given growing expectations of falling borrowing costs.
  • The Global Business Investment Confidence Index increased 23.3%, signaling a meaningful uptick in optimism for capital spending, backed by an accommodative global monetary policy. Globally, small and medium-size businesses were more confident about the environment for M&A activity than larger businesses, likely because they see themselves as potentially attractive acquisition targets, especially promising startups in digital, fintech, and AI.
  • The Global Business ESG Index increased 8.0% as businesses look to re-engage their sustainability initiatives. In the survey, more than one in two respondents indicated increased funding for ESG-related activities.