The business world still seems to be of two minds when it comes to the potential for economic growth around the globe, with more confidence being expressed by corporate executives in North America compared to those in Latin America, Europe, and elsewhere.
While 57% of the CFOs polled by EY believe the global economy is improving, the firm said “striking differences” exist in regional markets, with two-thirds of CFOs from North America confident that economic conditions are improving while fewer than half of CFOs from Latin America, Eastern Europe and Middle East/Africa see their economies growing.
Moreover, confidence in key economic indicators also varies widely by region, EY found. While 66% percent of CFOs from North America are confident when it comes to short-term market stability, only 42% of CFOs from Western Europe and 40% of CFOs from Eastern Europe maintain that sentiment. In addition, a 21-percentage point gap exists between North American and Latin American CFOs when it comes to their optimism around credit availability.
On a side note, take a look at the confidence Old Dominion Freight Line (ODFL) is expressing for LTL growth potential in the second quarter this year. That N.C.-based carrier expects its LTL revenue per hundredweight, excluding fuel surcharges, to grow between 3% and 3.5% over levels experienced during the same period last year – a boost from its previous expectations of 2% to 2.5% growth.
ODFL is also expecting growth in LTL tons per day to be in a range of 14% to 14.5% for the second quarter this year, based in no small part on a 14.1% jump in tonnage experienced this April and a 14.5% uptick being forecasted for May.
Still, despite such data, CFOs in particular are keeping a wary eye on several risks that could upend the economic growth applecart, said Tom McGrath (seen at right), senior vice chair of accounts for EY’s Americas division.
"The results [from EY’s survey] show that on a global basis, most CFOs are confident about economic conditions, but we're seeing this optimism become unstable," he cautioned. "As we scratch the surface, divergent market outlooks do exist in part due to geopolitical risks and slower growth in emerging markets."
In the U.S., for example, political instability, slower growth in emerging markets and Federal Reserve policy are the top three risks CFOs are most concerned with, McGrath noted.
Here are a few other interesting findings from EY’s CFO poll:
In essence, then, while some good trends are shaping it, it’s still not green lights all the way for economic growth – which, frankly, is a scenario most of the business world, trucking included, is quite used to by now.