The Grant Thornton International Business Report (IBR) is a quarterly survey of business leaders from across the globe. Launched in 1992 in nine European countries, the report now surveys more than 12,000 businesses in 44 economies on an annual basis, providing insight into the economic and commercial issues affecting both listed and privately-held businesses.
The 2013 report estates that the global economic outlook remains highly uncertain. The eurozone sovereign debt crisis is perhaps the key challenge, and not just for business leaders in Europe. The European Union (EU) is China’s largest trading partner, and China is the EU’s second largest trade partner after the United States. China remains the world’s largest exporter, but the slowdown in Europe has weighed on economic growth.
Growth rates in and around Europe look set to disappoint over the next 12 months. Having contracted by 0.4% in 2012, the eurozone is expected to expand by just 0.2% in 2013. Despite being outside of the single currency, the UK is expected to post growth of just 1.1% in 2013, following a forecast contraction of 0.4% in 2012.
The emerging economies of central and eastern Europe are expected to grow faster in 2013 (2.6%) but their rates of expansion remain depressed by a slowdown in foreign direct investment (FDI) inflows.
The relative decline over the past 12 months is also most pronounced in European economies, with 10% fewer businesses in the Eurozone planning to hire workers in 2013 compared with 12 months previously. Expectations in Belgium, France, Finland, Italy, the Netherlands and Spain have all declined.
The situation in Europe appears tighter, with concerns remaining over the exposure of many of the region’s banks to risky sovereign debt. Around one in four businesses in the EU cite each of the financial constraints, boosted by the Southern Europe.