By Kathleen Madigan
Businesses in the U.S. and around the world are taking a dimmer
view of the future, according to a global survey released Monday,
leading to cutbacks in employment and spending plans.
Optimism among 6,100 companies surveyed by Markit fell sharply
in October, according to the data provider's Global Business
Outlook Survey that is conducted three times a year.
"The number of companies that expect activity to be higher in a
year's time exceeded the number expecting a decline by some 28%,
but this 'net balance' had stood at +39% in the summer," the report
said.
Hiring and investment plans around the world were also weaker in
October. Weak consumer demand means companies have little reason to
expand staffs or facilities.
Markit pointed to a long list of reasons for reduced business
confidence.
"Key threats include fears of a worsening global economic
climate, and notably a renewed downturn in the euro zone, the
prospect of higher interest rates in countries such as the U.K. and
U.S. next year, geopolitical risk emanating from crises in Ukraine
and the Middle East, plus growing political uncertainty in many
countries," the report said.
Of the major economies surveyed, U.K. companies remained the
most upbeat about the year ahead, although even U.K. optimism fell
from earlier readings.
The U.S. results showed optimism at the lowest level since
Markit began the survey in 2009. "U.S. growth therefore looks
likely to have peaked over the summer months, with a slowing trend
signalled for coming months," said Chris Williamson, Markit's chief
economist.
Emerging markets also showed more pessimism in the survey.
"Russia is the biggest concern, with sanctions, a spiralling
currency and uncertainty driving business expectations down sharply
to a new low," said Mr. Williamson.
Prospects for China were more upbeat, he said. "A slight upturn
in business expectations in China provides some hope that companies
there are at least not expecting a hard landing."
The Markit survey was conducted Oct. 13-29.
Write to Kathleen Madigan at kathleen.madigan@wsj.com