Uncertainty surrounding the UK leaving the European Union has significantly hurt the business morale in Europe since November, and a clear divide between the East and the West has emerged in terms of global business confidence, results of a survey showed on Thursday.
The proportion of surveyed businesses in Europe who were confident of growth in the next six months fell to 50 percent, marking a fall of nearly a third from November, the 2019 Global Risk & Confidence Survey by the commercial insurance provider CNA Hardy showed.
Weak growth, poor productivity, high unemployment, civil unrest due to immigration, tax inequality and Brexit delays are the other factors hurting confidence in Europe, the report said.
In the UK, only 36 percent of business leaders were confident of growth and prosperity versus 71 percent a year ago. For British businesses, economic risk was the top concern above political, technological and cyber risks.
A similar trend was seen in North America, where 59 percent businesses were confidence of future growth, an 8 percent fall over the past six months. Economic and policy shocks continued to weigh down improving economic fundamentals.
"The mood is very much cautious and 'wait and see' as the run up to elections in both Canada and the US introduces risk into any sector subject to the impact of changing public policy," the report said
Meanwhile, Asia-Pacific was the only region to buck the trend where the confidence level climbed by 23 percent to 65 percent in the past six months. The report said executives globally were looking to Asia as they believe the region has the greatest capacity to drive growth.
The supporting factors for Asia include the leadership of the region in natural resource wealth, agriculture, mined elements, rare earths and manpower, the report said. Further, the region is a major consumer of global output and has significant trading relations with the rest of the world.
The global survey also found that reputation risk has emerged as the latest threat to the economy.
"In an increasingly complex, tech-led, interconnected global economy, business leaders are being tested like never before," CNA Hardy CEO Dave Brosnan said.
"The result is that confidence has dipped, investment in business fundamentals is down across the board and reputation risk has emerged as the new threat that stalks the corridors of power."
The latest survey was conducted online between February and March, among 1,500 business leaders of multinational firms with operations in Europe.