World Inc sees woes: Boston Consulting

The BCG survey found that half of the respondents expect an ‘L-shaped’ recovery,referring to a slow and difficult one.

This is a significantly higher percentage than in March 2009,when only 17 per cent were so pessimistic. It also runs counter to the prevailing view,which is suggested by stock market movements and investor behaviour indicating that “the crisis is behind us.”

The survey found that the corporate mood was even gloomy in some countries. In Spain,64 per cent expect an L-shaped recovery,in Italy,57 per cent expect such a recovery,while in France,the figure is 52 per cent.

The Japanese executives were most pessimistic,with 72 per cent expecting an L-shaped recovery.

“The somewhat fatalistic views of these global executives corroborate our perspective that one should not be overly influenced by short-term economic indicators.

“For the West,at least,once the stimulus effect wears off,we should expect an anaemic recovery – the sort of slow – growth environment that will change the rules of the game for companies as they seek to grow amid increased competitive intensity,” BCG senior partner David Rhodes said.

Among other findings from the survey,around 61 per cent respondents think profitability will continue to drop and 60 per cent of top executives surveyed expect increased consolidation in their industry.

Most developed economies,particularly the US,face a prolonged period of slower growth. The world view is hardly one conducive to job creation,investment,and risk taking.

Executives are,in fact,less enthusiastic about the economic outlook than many of their governments,the report added.