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Results of the International Business Report (IBR) for the fourth quarter of 2011 shows
the global economic outlook is still dominated by the crisis in the eurozone, and fears are
increasing that business growth will become even more difficult this year.
The latest research from Grant Thornton International shows that global business optimism in the
fourth quarter of 2011 stands at net 0%, indicating a balance between those business leaders feeling
optimistic about their economies in 2012 and those feeling pessimistic, a decline from
3% in Q3 2011 and 31% in Q2 2011.
Optimism levels in the BRIC economies (up from 25% to 34%) and the United States (up
from -1% to 2%) have shown improvement over the last quarter. However, optimism in Europe
plummeted from 0% to -17% in Q4 and within the eurozone, optimism fell from 2% to -16%.
"Heading into 2012, we're seeing a polarization of business confidence between Europe and
the rest of the world," said Ed Nusbaum, CEO of Grant Thornton International. "However,
the threat of total meltdown in the eurozone means business leaders remain uncertain about
the year ahead—they simply do not know how things will turn out. That uncertainty is
sapping confidence and choking business growth prospects."
Only 13% of businesses in Canada cite a shortage of orders/reduced demand as a constraint on
growth in 2012, compared with 31% in the US and 37% globally. However, 42% identify a
lack of skilled workers as a growth constraint in 2012, much higher than in the US (18%)
or globally (28%).
Despite a drop in net business optimism from 60% in the third quarter to 46% in the fourth
quarter of 2011, Canada is still significantly above the global average, and ranks alongside
Germany as the most optimistic mature economy. Canada is also one of the few major economies,
behind India and Australia, that plan to raise wages above inflation.