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Automotive capital confidence barometer - Economic outlook - EY - Global

Automotive capital confidence barometer

Economic outlook

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What is your perspective on the state of the local economy today?

Automotive capital confidence barometer - Economic outlook

With regards to employment, which of the following does your organization expect to do in the next 12 months?

Automotive capital confidence barometer - Economic outlook

Please indicate your level of confidence in the following industry drivers at the global level. (respondents could select two)

Automotive capital confidence barometer - Economic outlook
58% of automotive respondents said that they felt the global economy was improving, more than double the 25% seen in October 2011.

After a turbulent period in the second half of 2011, the global economy shows some signs of stabilizing.

Global economic outlook gains momentum

Compared with six months ago, when we published our previous Capital Confidence Barometer, automotive executives are markedly more optimistic about the economic situation. The percentage of respondents who think the global economy is improving has increased from 25% in October 2011 to 58% in April 2012.

The vast majority believe the improvement is modest as opposed to strong. Only 13% are pessimistic about the economy, compared with 36% six months ago.

What is your perspective on the state of the global economy today?

Automotive capital confidence barometer - Economic outlook

Confidence shifts from emerging to developed markets

After three years, in which corporations looked to the emerging markets for signs of hope, there are modest signs of a shift in sentiment. The number of automotive respondents who believe the local economy is stable or improving increased from 73% to 91% over the past six months. Similarly, the trend in the US and BRIC regions both increased from 65% to 97% over the past six months.

Earnings and employment growth fuel confidence

Sentiment around corporate earnings and economic and employment growth underpin a more positive outlook in corporate confidence. In fact, 92% of automotive respondents plan to maintain or increase the size of their current workforce in the next 12 months.

In addition, respondents indicate that credit availability and the regulatory environment are showing modest signs of improvement. Despite these encouraging indicators, respondents continue to think volatility in financial markets poses a concern.

Only 4% are confident about the prospects for short-term market stability, compared with 11% six months ago. Successful companies will adapt to this increased volatility as the "new normal."


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