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Grant Thornton Optimism Index drops to lowest point in 7 years
added: 2007-08-09

Grant Thornton LLP’s Business Optimism Index, a semiannual confidence measure of U.S. business leaders, has again dropped from 64.1 in November 2006 to 59.5 – the lowest it has been since it was introduced in May 2002.

The survey reveals that while overall optimism for company growth remains high at 80 percent, the degree of optimism has shifted dramatically over the years. The percentage of senior executives who are “very optimistic” about the growth of their business over the next six months has continued to decline, from 38 percent in May 2002, to 28 percent last November, to 20 percent in the most recent survey. Meanwhile the percentage who say they are “somewhat optimistic” has increased from 54 percent in May 2002, to 56 percent in November 2006, to 60 percent in June 2007.

Executive opinion regarding the economy has also continued to deteriorate. While executives remained steady throughout 2006 with 30 percent saying that they thought the national economy would improve in the next six months, in June 2007 only one out of four (24%) feel that way. The number of executives that are positive about the economy has been in decline since November 2003 when it reached a high of 83 percent. The number of those that feel the economy will worsen has increased 5 percent to 20 percent since the last survey was conducted, and tenfold when compared with the low of 2 percent from May 2002.

In the area of hiring, the number of executives who expect their companies to increase employee headcount over the next six months has gone down by 11 percentage points, from 53 percent to 42 percent, since the survey was last conducted in November of 2006. Eleven percent (11%) expect their companies to decrease headcount, versus 8 percent in the last survey.

The Business Optimism Index has been declining more or less steadily since it hit an all-time high of 75.6 in November 2003.

 Grant Thornton Optimism Index drops to lowest point in 7 years

About the Grant Thornton Business Optimism Index

The Business Optimism Index, part of Grant Thornton’s semiannual survey of U.S. Business Leaders, is comprised of three measures:

* U.S. economy: Business leaders’ perceptions of whether the U.S. economy will improve, remain the same or deteriorate in the next six months.

* Business growth: Business leaders’ perceptions about the growth of their own businesses over the next six months.

* Hiring expectations: Whether businesses expect the number of people their companies employ to increase, remain the same or decrease in the next six months.


Source: PR Newswire

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