Business Confidence Levels

Business confidence slipped a bit more in early October. Confidence remains high, but is now measurably off its late summer peak. Optimism has softened across the globe and most industries. Businesses remain cautious in their hiring and investment.

Businesses remain optimistic, but somewhat less so in the past few weeks. The four-week moving average fell again in early October. Confidence is still more than 35% above where it was at the start of the year and more than double where it was at its nadir in the lead up to the Iraq war.

Confidence in North America slipped a bit, with weaker responses coming from those in the financial services and high-technology industries. There has also been a softening in confidence among healthcare providers in recent weeks, as discretionary healthcare spending has softened, and the pharmaceutical industry is struggling with a number of key drugs coming off patent. U.S. based manufacturers, in contrast, continue to turn more positive. The somewhat weaker dollar and improved demand are providing substantial support.

Optimism in Asia continues to strengthen, particularly among transportation and travel companies. Japanese respondents have become notably more upbeat. European confidence has firmed as well, suggesting that the worst is past for the region's economy. Latin American confidence has yet to improve noticeably, as the Brazilian, Mexican and Venezuelan economies continue to struggle.

Source: Economy.com (If you subscribe)