I subscribe to reports and analysis produced by McKinsey and Company.  The purpose of which is not to try to picj and time investment decisions but to get an understanding on what is happenning in the global economy for my own personal interest and as a point of discussion with clients.

McKinsey publish a regular report based on results from surveys conducted by company executives.  What stood out in the latest report was a graph looking at the profit expectations, changes in the workforce and expected demand.

The results showed that more company executives thought that company profits would increase going forward, the first time since September 2008.  Expected demand for company priducts was also rising over the past 4 months of surveys (June to September)  and there is now an equal balance between those that expect workforce levels to rise compared to those that think they will fall.

It seems to me that this is further evidence that business sentiment is on the improve worldwide.  Similar conclusions have been coming through business sentiment surveys here in Australia and in the US.

The report concluded with the following points looking forward:

? Most companies are not in crisis: they're managing in a new normal, with an enlarged role for government and lower long-term growth expectations.

? Innovation is more important than ever; the companies that have the highest hopes for their own futures are likeliest to be focusing on it.

? January was the month when executives expressed the direst views about the economy. They now look forward to economic growth, but few expect a quick, full recovery.

The report does nothing to change my view that although things are much improved from the dark days of late 2008 and early 2009, the road back is a long one.

Regards,
Scott Keefer