The global economy in 2016

Businesses resilient in face of growth challenges

Economic conditions worsened in late 2015, leading the IMF to revise global growth estimates from 3.8% to 3.6%. The slowdown of China’s economy contributed to stock market volatility and falling commodity prices. Despite uncertainties, global business optimism remains at 36%, similar to last year’s 35%. The Fed’s interest rate hike and tighter monetary policy have dented US business optimism, fueled by export concerns. Recent stock market and oil price fluctuations make 2016 unpredictable. Grant Thornton’s International Business Review (IBR) will provide quarterly insights into business sentiment amid these turbulent times.

The IBR draws on more than 10,000 interviews with business leaders and international economic forecast data, this latest report explores the growth drivers and constraints facing dynamic businesses over the next 12 months including economic uncertainty, export growth, and business propensity to reinvest among other indicators.

• Net 36% of businesses globally are optimistic about their local economy up slightly from this time last year.
• Businesses worldwide are reporting low export expectations and The Federal Reserve interest rate hike hurt US business export expectations especially hard in the fourth quarter.
• Worldwide expectation of an increase in infrastructure and R&D investment has fallen this year compared to last, with emerging market sentiment weighing on forecasts.
• Economic uncertainty is set to be the biggest concern for global business in 2016, with red tape and a lack of skilled workers also weighing on the minds of leaders.
• Global employment expectation for the coming 12 months has remained broadly stable over the past year.