September 2024
Executives surveyed in the latest McKinsey Global Survey on economic conditions point to geopolitical instability and transitions of political leadership as the top threats to both the global economy and domestic growth over the next year.1 Yet they continue to see weak customer demand and increasing industry competition as the most pressing risks that could affect their companies’ performance. Respondents’ expectations for their companies’ workforce size have tempered over the past year, and now less than one-third of respondents expect their employers to increase their head count in the months ahead. Conversely, their views on future customer demand and profits remain primarily positive and, overall, unchanged from the previous two quarters. Respondents working in advanced industries such as automotive, aerospace, and semiconductors, however, have much more cautious views than they did a year ago.
Sven Smit is the chair of insights and ecosystems, chair of the McKinsey Global Institute, and a senior partner in McKinsey’s Amsterdam office. Jeffrey Condon is a senior knowledge expert in the Atlanta office, and Krzysztof Kwiatkowski is a capabilities and insights expert in the Boston office.
This article was edited by Heather Hanselman, a senior editor in the Atlanta office.
June 2024
Company-level optimism continues to moderate, though survey respondents remain more buoyant than downbeat.
For the second survey in a row, private-sector respondents to our newest McKinsey Global Survey on economic conditions are slightly less positive about their companies’ prospects than in the previous quarter. Forty-nine percent now expect demand for their companies’ products and services to increase, the smallest share to say so since July 2020—and down from 57 percent who said so six months ago. While they are more hopeful about profit growth, the 56 percent who believe profits will increase is the smallest it’s been in nearly two years.2 Fittingly, weak consumer demand tops respondents’ lists of risks to their companies’ growth, followed by increasing industry competition and policy and regulatory changes.
Profits: Most private-sector respondents believe their companies’ profits will grow in the coming months, but the share saying so is in decline. Fifty-six percent of private-sector respondents expect an increase in profits, down from 61 percent in March and 60 percent in December 2023. Across industries, respondents in financial services have the highest expectations for company profits. This is followed by 63 percent in technology, media, and telecommunications, while their peers in energy and materials and professional services report steep declines since March.
Customer demand: For the first time in nearly four years, less than a majority of respondents expect demand for their companies’ offerings will increase in the next six months. With 49 percent saying so, they remain more positive than negative; only 17 percent expect demand will decrease. But it’s the smallest share to expect growing demand since July 2020 (shortly after the pandemic began), when 48 percent of survey respondents said the same. In the energy and materials and consumer goods and retail sectors, respondents are less optimistic than others—and than they were in the past four quarters.
Workforce size: As we saw in the previous survey, respondents tend to believe their companies’ workforce size will stay the same in the months ahead. Forty-three percent of them say so, while another one-third expect head count to increase. Across sectors, respondents are most optimistic about workforce growth in advanced industries (which we also saw in March) and least so in professional services, with only 22 percent predicting their workforce size will increase.
This update was edited by Daniella Seiler, an executive editor in McKinsey’s Washington, DC, office.
March 2024
Respondents share more cautious views about demand for their companies’ products or services than in late 2023, but expectations overall for profits remain just as positive.
For the first time in five years, executives surveyed in the latest McKinsey Global Survey on economic conditions point to policy and regulatory changes as a top threat to their companies’ performance more often than any other risk.3 Yet weak demand—the most cited risk throughout 2023—remains a top concern; it is now the second-most-cited threat to growth. Furthermore, respondents’ expectations have tempered regarding demand for their companies’ goods or services. The share of respondents predicting increased demand over the next six months is smaller than it was in any of our economic-conditions surveys in 2023. However, their expectations for their companies’ profits remain hopeful for the months ahead, and they continue to expect little change to their companies’ workforce size.
This update was edited by Heather Hanselman, a senior editor in McKinsey’s Atlanta office.
December 2023
Expectations for companies’ prospects remain positive overall but are more reserved than in September.
In the latest quarterly McKinsey Global Survey on economic conditions, respondents offer cautious optimism about their companies’ performance for the first half of 2024. Most private-sector respondents expect their companies’ profits and demand for their offerings to increase, though in a change from previous quarters, they now primarily expect their workforce size to remain the same rather than to grow. Respondents are more likely now than in September to view geopolitical instability as a top risk to their companies’ growth, while concerns about supply chain disruptions are cited by the smallest share of respondents since September 2021.
This update was edited by Heather Hanselman, an editor in the Atlanta office.
September 2023
Compared with last quarter, respondents share more optimistic views on their companies’ profits. Those working in advanced industries report particularly rosy outlooks.
In the latest McKinsey Global Survey on economic conditions,4 private-sector respondents express optimism about companies’ prospects in the months ahead. The share expecting their companies’ profits to increase in the next six months is the highest in two years, and most respondents continue to expect customer demand to grow as well. These rosy views come as 60 percent report price increases in the past six months, up from 53 percent in the June survey. Respondents in advanced industries such as automotive and aerospace are the most likely to say their companies recently increased prices—and are the most hopeful about the months ahead. Respondents working in energy and materials, on the other hand, offer a more somber outlook now than they did in the previous survey.
Profits: Two-thirds of respondents expect their companies’ profits to increase in the next six months, the largest share since October 2021. Advanced industries is the only industry in which significantly more respondents expect a boost in profits compared with the previous quarter’s survey.
Consumer demand: Fifty-six percent of respondents expect demand for their companies’ products or services to increase in the months ahead, about the same share seen in the earlier 2023 surveys. Respondents in financial services have grown increasingly more optimistic throughout 2023, and those in advanced industries are now much more likely than in the previous quarter to expect demand to increase, while the opposite is true in energy and materials and in professional services.
Workforce size: Consistently since the September 2022 survey, about four in ten respondents have said that they expect their companies’ workforce to grow, with a similar share expecting no changes. However, in the latest survey, we see a significant decrease in the share of respondents in energy and materials and technology, media, and telecom expecting their workforce size to increase in the next six months.
The survey content and analysis were developed by Jeffrey Condon, a senior knowledge expert in McKinsey’s Atlanta office; Krzysztof Kwiatkowski, a capabilities and insights expert at the Waltham Client Capabilities Hub; and Sven Smit, chair of insights and ecosystems, chair of the McKinsey Global Institute, and a senior partner in the Amsterdam office.
This update was edited by Heather Hanselman, an editor in the Atlanta office.
June 2023
Private-sector respondents report consistently positive views about their companies’ profit, demand, and workforce prospects.
In last month’s McKinsey Global Survey on the economy, respondents report steadily rosier views on conditions in their own countries and in the world economy. Yet at the company level, the results suggest a tendency toward the status quo. While private-sector respondents remain more positive than not about their companies’ near-term prospects, they are more likely than they were in March to believe profits and demand for their offerings will hold steady. Meanwhile, their workforce expectations are nearly identical to what we saw last quarter.
Profits: After three consecutive quarters of rising expectations, the survey suggests that views on profits have steadied. A clear majority (60 percent) of private-sector respondents still believe their companies’ profits will grow, compared with 63 percent in March. By industry, respondents in energy and materials report the biggest jump since last quarter: 71 percent believe profits will increase in the months ahead, up from 45 percent in March. They are also tied with their peers in consumer and retail as the most optimistic about their companies’ potential profits.
Customer demand: Likewise, respondents remain as positive about demand for their companies’ offerings as they were last quarter; 55 percent expect increasing demand over the next six months. At the same time, the share expecting demand to hold steady has grown to 32 percent, up from one-quarter who said so in March. Again, respondents in energy and materials are the most optimistic about potential demand, and much more so than they’ve been in previous quarters.
Workforce size: On the whole, respondents’ views on workforce size are almost the same as they were in March. This quarter, 41 percent expect their companies’ workforces will grow—the same share that said so previously—while another 39 percent, versus 37 percent in March, believe head count will stay the same. Across industries, respondents in advanced industries are most likely to expect an increase in workforce size (which was also true in March), followed by their peers in energy and materials.
This update was edited by Daniella Seiler, an executive editor in the Washington, DC, office.
March 2023
Respondents’ enthusiasm for their companies’ prospects rose, and then came back to earth, in our latest surveys.
In last month’s McKinsey Global Surveys on economic conditions, we compared executives’ sentiment before and after the upheaval in the banking sector that began with the closure of Silicon Valley Bank.5 Respondents to our initial survey reported increasing optimism about the broader economy’s performance as well as their own companies’ performance. Three weeks later, their views tempered—although when it comes to profit expectations, they have been more upbeat throughout March than in the previous three quarters.
This update was edited by Daniella Seiler, an executive editor in the New York office.
December 2022
Compared with last quarter, respondents share more optimistic views for their companies’ future profits. However, expectations overall for company performance are more muted than at the start of 2022.
In the latest McKinsey Global Survey on economic conditions, expectations for the respondents’ domestic economies are more pessimistic now than at the start of 2022. The same holds true for company performance, though respondents’ expectations for their companies’ profits are more upbeat now than in September. For the first time this year, weak customer demand tops the list of cited risks to company growth over the next year, overtaking supply chain disruptions—the most-cited threat in the previous two quarters.
Profits: Respondents are much more likely now, compared with the September survey, to expect profits to increase: 59 percent say their companies’ profits will grow in the next six months, up from 51 percent in the previous survey. We see optimism increasing in each industry. However, those findings remain less cheery than in the March survey, when nearly two-thirds of all respondents expected profits to grow.
Customer demand: Just 51 percent of respondents expect demand for their companies’ goods or services to increase over the next six months, the same share as in September. Looking across industries, respondents in advanced industries and energy and materials have become increasingly more likely since June to predict growing demand.
Workforce size: Thirty-eight percent of respondents expect their companies’ workforce size to expand in the next six months—the same share that expect their workforces to remain the same. In the last three surveys, an increasing share of respondents in energy and materials expect their workforces to grow, and in the latest survey we also see respondents in advanced industries more likely than in September to expect a growing workforce. On the other hand, respondents in consumer goods and retail are now less than half as likely as in the first 2022 survey to predict a growing workforce.
This update was edited by Heather Hanselman, an editor in the Atlanta office.
September 2022
Across industries, only respondents working in energy and materials and financial services report more upbeat expectations for their companies’ profits or demand for their goods or services than in the previous survey.
In the latest McKinsey Global Survey on economic conditions, respondents’ expectations for their companies’ performance are more somber than they have been since early in the COVID-19 pandemic. This pessimism comes as companies feel the impact of cost increases. Nine in ten respondents report cost increases in the past six months—particularly the effects of rising energy prices and material costs. Yet respondents in sectors such as energy and materials and financial services report brighter spots compared with the June 2022 survey.
Profits: Responses reveal a continued pessimism toward future company growth. Just over half of all respondents expect profits to increase, down from 65 percent six months ago. While in most industries, expectations for profits have become less positive since December 2021, respondents working in the energy and materials sector have a rosier view of their profits over the next six months than they did last quarter.
Customer demand: Overall, just 51 percent of respondents expect demand for their companies’ goods or services to increase over the next six months, the smallest share since July 2020. While respondents in consumer goods and retail and technology, media, and telecommunications are much more pessimistic about demand than they have been since mid-2020, respondents in financial services and advanced industries are more hopeful now than in the previous survey.
Workforce size: Nearly four in ten respondents expect their companies’ workforce size to expand in the months ahead. While respondents’ expectations for hiring in many industries remain mostly aligned with the previous quarter’s, respondents in financial services are much more likely now than in June to expect their employers to increase their headcount.
