Business leaders resigned to turbulent economic future.

• Author: Heffes, Ellen M.
• Position: STRATEGY - Survey

Top executives at large companies around the world anticipate rough going for the foreseeable future and voice less optimism than they did this time last year, according to a new survey of 440 executives in seven major economies by the Boston Consulting Group. BCG found that half of the respondents expect an L-shaped recovery--one that is slow and difficult; only 17 percent were so pessimistic when last surveyed in March 2009.

The survey found the corporate mood even gloomier in some countries. In Spain, 64 percent expect an L-shaped recovery; in Italy, 57 percent expect such a recovery, while in France, the figure is 52 percent. For the most pessimistic surveyed, the Japanese, 72 percent of the respondents expect an L-shaped recovery.

Of the results, BCG Senior Partner Daniel Stelter, said: "Most developed economies, particularly the United States, face a prolonged period of slower growth. The world view we're hearing from executives is hardly one conducive to job creation, investment and risk-taking. Executives are, in fact, less enthusiastic about the economic outlook than many of their governments."

Among the other key survey findings: Profitability is expected to fall even further, M&A is expected to increase and growth will be harder to achieve:

* 61 percent of respondents expect profits to continue falling (64 percent had that expectation last March);

* 60 percent expect increased consolidation in their industry, compared with only 42 percent last year.

* 69 percent believe growth will be harder to achieve moving forward (56 percent expressed that view last year).

Even consumer expectations have fallen, as executives expect less and respondents believe consumer attitudes have undergone a sea change. The majority of respondents--79 percent--expect an increase in the savings rate in their country, which will translate into less spending (54 percent anticipated increased saving last year). And, fully 89 percent now anticipate increased consumer price sensitivity, up from 71...