Latin America leads the world in business optimism says Grant Thornton survey

Latin America leads the world in business optimism says Grant Thornton survey.

Confidence levels over economic performance are higher in Latin America than any other part of the world as the region leads the way on business optimism into the New Year, according to the 2011 Grant Thornton International Business Report (IBR). 2011 is the first year Latin America has led the world on optimism.

Across Latin America, a balance of +75% of privately held business owners are optimistic about their region's economic performance in 2011. Elsewhere, optimism in the Asia Pacific region (excluding Japan) is at +50%, whilst in North America it is just +26%, with Europe the least optimistic region at +22%.

Within Latin America, Chile (+95%) scored the highest optimism of any country surveyed followed by Brazil (+79%), Argentina (+70%) and Mexico (+64%).

Ed Nusbaum, CEO of Grant Thornton International, said, "In recent years the focus for emerging economies has been on the BRIC economies of Brazil, Russia, India and China. However, Latin America has come a long way. The region as a whole is expected to see GDP growth of around 4% in 2011 and if the current business confidence translates to widespread, sustained growth, the next decade could see Latin America truly realise its potential. If the economic story of the last decade was about the BRICs, these results suggest the next decade will be about Latin America."

"The success and growth of Brazil has a big impact on its neighbours. The country's sustained economic growth, which is forecast by the IMF to be 7.5% for 2010, is buoying the region and spreading optimism to neighbours in Chile, Argentina and Mexico. It is also impossible to ignore the knock-on effects right across the region since Brazil won the right to host the 2014 World Cup and the 2016 Olympics. These events will provide a real economic boost for all of Latin America and that has undoubtedly translated into a sense of confidence and optimism."

Optimism swings and a polarised Eurozone

The 2011 IBR reveals some big swings in optimism levels in key economies. Businesses in Germany are the most optimistic in the Eurozone at +75% - an optimism which has surged over the past year (2010: +38%). In addition Finland (+57%), Belgium (+45%) and the Netherlands (+19%) are all experiencing high levels of business confidence going into 2011. However, going into 2011 confidence is understandably low throughout those Eurozone economies experiencing sovereign debt troubles with Ireland (-45%), Spain
(-50%) and Greece (-44%) at the bottom of the global league table.

Ed Nusbaum, said, "This year's report tells a concerning tale of two Europes. Diverging levels of business confidence across the region will put increasing strain on a Eurozone that has had a turbulent 2010. Maintaining a monetary union across nation states that are pulling in opposite directions will be increasingly difficult. The Eurozone seems likely to go through several years of tension and a period of persistent volatility in financial markets. 2011 could prove a tipping point for the euro."

Asia Pacific, last year's leading region for business optimism, has seen a significant fall from +64% to +50% as economies such as mainland China (down from +60% in 2010 to +42%), Australia (down from +79% in 2010 to +37%) and New Zealand (down from +66% to +35%) showed large negative swings in optimism.

Ed Nusbaum, said, "The global recession has caught up with Australia and New Zealand - it appears they have both been through something of a ‘reality check' over the last 12 months."