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© 2011 Grant Thornton International Ltd. All rights reserved.
The global economy in 2012: a rocky road to recovery
Grant Thornton International Business Report
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The year ahead
• recovery from financial crisis remains uncertain
• growth prospects in mature markets look weak
• emerging markets expected to drive the global economy
• shift in economic power from 'west to east' is speeding up.
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Business confidence
• business confidence for the year ahead strong at the start of 2011, led by buoyant Latin America
• in Q1, mature economies began to catch up but political, economic and natural unrest saw optimism slide in Q2
• by Q3 optimism had fallen to net 3% - its lowest since 2009.
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Business operations
• expectations for revenues and profits rebounded strongly from 2010
• but expectations fell in Q3, with more businesses citing a shortage of orders/ reduced demand
• bureaucracy an increasing constraint in emerging markets.
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Investment
• expectations for investment in plant & machinery and buildings rose, but fell for R&D
• plans for investment in emerging markets remain robust
• inadequate ICT and transport infrastructure holding businesses in emerging markets back.
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Inflation
• loose monetary policy and high commodity prices increasing inflationary pressures
• percentage of businesses expecting to raise prices over next 12 months has risen
• improved salary expectations, although few businesses expect to offer above inflation increases.
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Employment
• hiring expectations improved from 2010, particularly in emerging markets
• Q3 results point to a tightening in labour markets
• lack of skilled workers dampening business growth prospects in emerging markets.
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Access to finance
• financial constraints fell, following a sharp dip in 2010• financing businesses less of an issue in mature markets,
excluding troubled eurozone• lender support generally strong, with three-quarters of
businesses citing lenders as supportive.
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Topical issues
• the full report also contains stories on:– women in business– corporate social responsibility– Arab Spring– renewable energy– lease accounting– social media.
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More information
• the full report is available on the IBR website– internationalbusinessreport.com/reports/2011
• for more information about IBR please contact Dominic King at [email protected]