Economic conditions outlook, September 2021 by McKinsey
Eighteen months after the COVID-19 pandemic began, executives responding to our latest McKinsey Global Survey feel the economy is on the verge of recovery. Their opinions have remained continuously positive throughout 2021: the economy is improving, and the future is even brighter. Respondents are more than twice as likely to think economic conditions in their home nations are better now than they were six months ago, compared to a year ago.
Yet, with the Delta variant hitting so many countries, concerns about the pandemic's economic impact have resurfaced—just one quarter after a historically low share of respondents identified it as a risk to domestic economic growth. Additionally, respondents are more likely to see interruptions in supply chains and inflation as dangers. In comparison to respondents from emerging economies, respondents from established nations cite all three of these challenges as dangers to growth more frequently. Additionally, they are less optimistic about the economy and their own companies' prospects in the months ahead.
The general mood is consistently optimistic.
Respondents to our most recent survey continue to have overwhelmingly favourable opinions of the economy, both domestically and worldwide. Although confidence has increased in recent surveys, the shares reporting improvements have not increased from the previous quarter. Sixty-seven percent of all respondents report that economic circumstances have improved in their own economies, down from 73% in June.
Across geographies, majorities of respondents in every region except Asia–Pacific (where sentiment is significantly more pessimistic now than in June) think their home nations' economic conditions have improved in the last six months. Notably, sentiments in India have improved significantly during the last quarter. Eighty-five percent of executives there now report economic growth, up from 33% prior. And, while respondents in North America are less optimistic than they were in June, two-thirds still believe conditions are better than they were six months ago.
Meanwhile, prospects for economic improvement remain stable, if not diminishing. Respondents are just as likely (71%) as they were in July to expect that global economic circumstances will improve over the next six months, down from an all-time high of 81% in the previous quarter. When questioned about their nations' economic prospects, 65% of respondents now expect their home economies to prosper, down from a range of 73% to 79% in March 2021. In several regions (notably Europe and North America), perspectives on the economy's future are more pessimistic than those on its current status. 51% of respondents in North America expect domestic economic circumstances will improve in the next six months, compared to 66% who feel they have improved in the last six months.