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3. Multinationals seem less inclined to implement major supply chain changes
In April, a mere 2% of executives were not planning any changes to their supply chains. In October, we saw this rise sharply to one-third. Mirroring this shift of sentiment, significantly fewer companies are contemplating reshoring or nearshoring (37% from 83% in April). The desire to move manufacturing from dominant source countries (previously 61%) has fallen 24 percentage points since April.
Many companies would prefer to avoid disruptive and costly reorganizations right now. Asia is showing early signs of recovery, and multinationals will maintain that presence for now. Even so, some may relocate selected critical activities to Europe, mitigating future disruption risks, but it will take time and incentives before this drives mass investments in Europe.
4. To drive investment decisions, executives cite immediate “back-to-business” priorities
Interestingly, far fewer foreign investors think that national stimulus plans alone will be a major factor in shaping their future decisions. This is in sharp contrast to the previous survey (32% in October vs. 80% in April).
Investors are now concerned with ensuring that work safety is first and foremost secured; this is particularly the case for sectors where employees are most vulnerable.
There is an attraction toward countries that have both the scale and capital market strength to secure new investment opportunities. This is corroborated by the three largest economies in Europe (Germany, France and the UK) being the most sought-after investment destinations.