Mumbai: The Grant Thornton International Business Report says that global confidence remains unexpectedly robust.

According to Grant Thornton International Business Report, businesses are resilient in the face of global financial turmoil.

In their annual survey of privately held businesses, the report shows that despite intense media coverage of the global financial crisis, 42 per cent of businesses report feeling optimistic about the economic outlook for the next 12 months. This is only three percentage points lower than that reported in January 2007.

Optimism in the United States has even gone up this year to 22 per cent from 14 per cent, despite the sub-prime mortgage crisis and resulting credit crunch.

When asked about specific business practices, survey respondents are positive about the future. It cites, for example, a balance of 64 per cent of businesses globally expect turnover to increase over the next 12 months. A balance of 34 per cent of businesses globally, are expecting to raise their selling prices over the next year. Also, 22 per cent of businesses are expecting to increase exports, a two per cent increase on 2007.

Misplaced optimism?
Grant Thornton cites Alex MacBeath, global leader of privately held business services as saying that the positive survey result are very encouraging, after a summer of financial turmoil, as they reflect confidence that the global economy will remain buoyant, though the robust pace of the past five years has come to an end. MacBeath says up next, is a period of uncertainty.

Key Threats over the coming 12 months
According to the report, these include the end of fixed rate mortgage deals for millions of homeowners. The financial implications are not only a marked slowdown in the global housing market, but also a reduction in consumer spending. There is also a fear that the seizure in credit may filter down to consumer credit and mortgage repayments causing significant increases in loan defaulting and home repossessions.

Most optimistic
Indian and Philippine businesses are the most positive with 95 per cent of businesses optimistic about the year ahead. The report attributes their optimism to the robust economic growth of recent years, and widespread expectations that the momentum will be sustained during 2008.

Most pessimistic
Japanese businesses are the least optimistic, or the most pessimistic. The Grant Thornton International Business Report shows a reversal of trends seen since 2003, with pessimism levels in this year's survey slumping from a balance of -5 per cent to -44 per cent.

The Grant Thornton International Business Report  website cites Chikahiko Honda, managing partner of Grant Thornton Japan as saying, ''The strength of the Yen is hurting exports. Low levels of Japanese consumer demand and the slowing US economy are strongly affecting sentiment. Furthermore, housing construction has drastically decreased due to tougher government regulations for housing inspection. These factors contributed to the economy shrinking in Q2 of 2007.''