Executives Downbeat On Global Economic Prospects

Compiled ByTraci Purdum The aftermath of Sept. 11's terrorist attacks has most executives more concerned about the global economy today than they were one year ago. However, two-thirds say they will continue to maintain levels of foreign direct investment (FDI) that are similar to last year's, according to a recent survey conducted by global management-consulting firm A.T. Kearney's Global Business Policy Council. The survey questioned CEOs and senior executives from the world's largest companies. Surveyed executives expect U.S.-led military action to have a greater impact on FDI decisions than energy price volatility, Japan's economic recovery, future trade rounds, or the launch of the euro. The study also found that 16% of global executives intend to increase investments abroad, while 20% say they will decrease investments. Three-quarters of the respondents say first-time outward investments likely would be destined for developing countries. Influencing investment decisions is a view that U.S. economic recovery will be delayed. "Despite the growing bearish global economic consensus, the world's largest foreign investors are keeping a 'steady-as-you-go' hand on their investment plans, with the course of the U.S. economy likely to exert the biggest influence over future FDI decisions," says Paul A. Laudicina, A.T. Kearney's vice president and managing director of the Global Business Policy Council. China is the only major economy to experience a positive shift in investor sentiment, due in part to its formal entry into the World Trade Organization next year.