Global Business Expectations Call for Slightly Slower Growth in Fourth Quarter; Dun & Bradstreet Survey of International Business Expectations Continues Trend Toward Lower Net Sales and Net Profits

Business Wire, Nov 27, 1995

WILTON, Conn.--(BUSINESS WIRE)--Nov. 28, 1995--Executives in developed markets worldwide reported slightly lower optimism for growth in net sales and net profits during the fourth quarter, according to The Dun & Bradstreet Corporation's most recent quarterly survey of international business expectations.

The survey marked the fifth consecutive drop in global expectations for net sales world wide, and the third consecutive decline in expected net profits.

"Business executives worldwide look for much more moderate expansion than they did a year ago, when optimism was at a peak level for the current business cycle," said Joseph W. Duncan, vice president and chief economist for The Dun & Bradstreet Corporation. "Despite slipping expectations, however, the outlook through the end of 1995 remains one of solid growth in sales and profits in nearly every region of the globe, excluding isolated situations in Japan, Mexico and Brazil. Although most regions predict some increases in selling prices, they also expect to see steady employment and inventories of finished goods."

Note to Editors

The current surveys, completed in September 1995, use similar sampling and interviewing procedures in all countries. Hence, the results provide unique "apples-to-apples" comparisons of trends in business expectations worldwide. The D&B index figures used here represent the net percentage of survey respondents expecting higher sales, profits etc. The indexes are calculated by subtracting the percentage of respondents expecting decreases from those expecting increases. The survey measures expectations in selected economies in North America, Asia, Europe and Brazil. Unless otherwise noted, the increases and decreases in indexes represent changes from the previous quarter.

Most Regions Report Slightly Lower Expectations for Fourth Quarter Net Sales and Net Profits

Expectations for growth in net sales and net profits during the fourth quarter declined slightly in every region surveyed except Europe. The World Indexes for net sales and net profits both fell two points, to 43 and 31, respectively. The largest decline in economic optimism was reported in the Pacific Region, where the Net Sales Index dropped five points to 29, and the Net Profits Index fell three points to 20.

"The high price of the yen in comparison to the U.S. dollar and other currencies clearly is expected to impact the region's performance through the end of the year," explained Duncan. "Imports from the U.S. and other markets have depressed prices and profit margins in Japan, compounding the impact of diminished exports of automobiles and other big-ticket items, as well as moves by some Japanese companies toward offshore manufacturing."

The North American Net Sales Index dropped very slightly to 52, and the Net Profits Index fell four points to 44. Despite these declines, the region reported the highest level of economic optimism of any region surveyed. But, because of continuing economic instability in Mexico, these indexes measured only expectations in the United States and Canada.

"Executives in both the United States and Canada look for stable conditions through the beginning of 1996, with only moderately slower economic expansion and sustained high employment levels," noted Duncan.

The European Region was the only area to predict faster growth during the quarter. The Net Sales and Net Profits Indexes increased very slightly, to 43 and 27, respectively. Expectations of significantly faster economic growth in Germany and Italy offset lower levels of optimism in the United Kingdom and Belgium.

The outlook for Brazil declined sharply for the third consecutive quarter. The Net Sales Index for Brazil fell 27 points to minus 18, and the Net Profits Index dropped 18 points to minus 35.

Growth in Selling Prices, Employment and Inventories Continue to Slow Worldwide

Continuing trends set earlier this year, survey respondents reported expectations for slower growth in selling prices, employment and inventories worldwide. The World Selling Prices Index fell two points to 24, and the Employment Level Index fell one point to 15. The Inventories Index also declined one point to 12.

The Pacific Region reported expectations for the slowest growth in all three indexes. The Pacific Selling Prices Index was 8, down from 13 in the prior survey. The Employment Level Index fell four points to 9, and the Inventories Index was unchanged at 6.

The North American Selling Prices Index declined four points to 29. The Employment Level Index was unchanged at 23, and the Inventories Index dropped three points to 17. The European Selling Prices Index was unchanged at 23. The region's Employment and Inventories Indexes both rose one point, to 12 and 7, respectively.

The Dun & Bradstreet Corporation is the world's leading marketer of information, software and services for business decision making, with worldwide revenue of $4.9 billion in 1994.

(See attached tabular data)

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