We all know the basic story with the U.S. economy: It's not terrible, but it's not great either, and muddling along may be as good as it gets for a while.
We've gotten used to the idea that the world economy generally follows what happens in America, but there's growing evidence that is no longer the case. Here's another troubling data point: CEOs in at least half a dozen large nations are more optimistic than their counterparts in America.
The latest annual CEO survey by consulting firm PwC finds that business chiefs' confidence in their ability to increase revenue over the next 12 months has fallen for the last two years. Overall, CEO confidence is higher than it was at the depth of the recession in 2009, but still a lot lower than it was before the recession.
There are huge variations by country and region, however. In the United States, just 30 percent of CEOs are confident about revenue gains over the next year. Here are the countries where CEOs have a better outlook:
-- Russia, where 66 percent of CEOs are confident about revenue growth. "There's a lot of political uncertainty in Russia, but they don't have a public debt issue like in the United States and much of Europe," says Bob Moritz, a senior partner at PwC. "And they've had a relatively good year with oil prices."
-- India (63 percent). A growing middle class and lots of long-term potential make CEOs optimistic about future gains.
-- Mexico (62 percent). Outsiders may equate Mexico with wanton drug violence and illegal immigration, but CEOs inside the country see a growing economy that stabilized nicely after the recession and includes a lot of businesses that have learned to operate under tough conditions.
-- Brazil (44 percent). This fast-growing nation of 200 million is on the upswing, signified by its hosting of the 2016 Summer Olympics. Brazil also has a strong trade relationship with China, boosting prospects for both countries.
-- China (40 percent). Despite worries about an overheated economy, China remains the top growth opportunity for many global firms, with a booming middle class that has money to spend.
-- Germany (31 percent). Debt woes elsewhere in Europe harm German exports, yet Germany's own economy remains very stable. And its leadership position may end up enhanced if Europe ultimately resolves its financial difficulties.
One reason CEOs in these developing nations (excluding Germany) are more upbeat than American business leaders probably involves the lower economic base from which they're starting. Developing nations by nature tend to grow faster than mature economies, making prospects bright for firms able to spot the right opportunities.
The United States also suffers from growing cynicism toward government that seems to be squelching growth not just in Washington, but in many state capitals as well. Business leaders from around the world losing confidence in America's ability to solve political problems is one reason the U.S. competitiveness ranking as measured by the World Economic Forum has fallen from first to seventh over the last four years. The same theme surfaced when Standard & Poor's downgraded the nation's credit rating in 2011. Downgrades from other rating agencies may be coming soon.
The United States is also vulnerable to many of the top concerns global CEOs have about the global business climate. While the top worry is social unrest--more of a problem in developing nations than in industrialized ones--the second-biggest concern is another U.S. recession, which would drag the world economy down with it.
That's followed by fears of a cyber attack or prolonged Internet shutdown, and a natural disaster that shuts down a major trading hub. American businesses have become regular targets for aggrieved and highly skilled hackers, and even for terrorist groups. Meanwhile, Superstorm Sandy and other destructive weather events have demonstrated how unprepared even sophisticated cities such as New York may be for natural disasters.
By PwC's reckoning, the number of manmade disasters affecting the business environment has tripled since 1970, and the number of natural disasters has risen sevenfold. In a paradox of progress, firms that operate in less-developed nations may turn out to be more resilient than those fully exploiting--and depending upon--electronic networks and other types of infrastructure that could be growing increasingly vulnerable.
For its woes, America still has a dynamic economy envied by many around the world. As with many aspects of life in America, however, the gap between us and them is narrowing.
Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
- Politics & Government
- Budget, Tax & Economy