Global business optimism continues to fall

Global business optimism continues to decline, revealing a 1.3% quarter-over-quarter decline in business optimism according to latest research by Dun & Bradstreet.

The fall in confidence follows a sharp 12.9% drop seen in the prior quarter. Persistent global economic uncertainty and rising trade protectionism continue to dampen global business sentiment.

While financial confidence dropped 8.6% amid challenging business conditions, optimism levels for supply chain continuity were flat. Further, investment optimism declined reflecting continued uncertainty over the pace of rate cuts in 2025.

Neeraj Sahai, President of Dun & Bradstreet International, said “In the face of macroeconomic uncertainty, rising capital costs, and a weakening growth forecast, businesses remain apprehensive about the global economic landscape and cautious about investment.

“The reshaping of trade relationships and tariff uncertainty contributed to over 90% of the economies surveyed reporting a decline in their financial confidence index, in both emerging and advanced economies. Cost expectations remain elevated, especially in the economies most exposed to tariff hikes.”

Export-driven sectors such as automotives, electricals, and metals saw sharp declines in business optimism, particularly in the U.S., Mexico, South Korea, and Japan, where rising tariffs and shifting trade policies have resulted in cost pressures and demand volatility. Financial risk perceptions remain elevated as businesses continue to deal with high borrowing costs amid tightening liquidity conditions and persistent inflation expectations. Globally, the perception of financial risk on business balance sheets has increased, with optimism levels falling 6% quarter-over-quarter.

The report’s Global Business Optimism Index further declined 1.3%, following a sharp 12.9% decline in the prior quarter. Sentiment across emerging economies held steady, with the decline driven by advanced economies where optimism fell 1.7%. However, a resurgence of inflation is viewed as being disruptive, with 86% reporting it would significantly affect operations. Tighter domestic monetary policy is seen as a significant risk by businesses globally, with 70% considering it highly probable and 83% expecting a material impact.

The Financial Confidence Index declined 8.6%, reflecting a business landscape clouded by macroeconomic uncertainty, the ongoing high cost of capital, a softening growth outlook, and the reshaping of trade relationships. Confidence declined across all business sizes, with large businesses being the most impacted. U.S. businesses particularly cite the potential impact of an inflation resurgence and tighter domestic monetary policy as top risks.

Arun Singh, Global Chief Economist at Dun & Bradstreet said “The prospect of a resurgence of inflation given higher import tariffs has tempered expectations for the scale of interest rate cuts, which will likely restrict business investment and can have broader effects on upcoming economic cycles.

“The challenges global businesses are facing continue to hinder recoveries and weaken financial resilience, particularly within large businesses – which reported a greater decline in financial confidence. While economic conditions are expected to improve slightly, the impact on businesses will be delayed, increasing the strain on their balance sheets this year.”