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51% of Executives want the Government to limit international travel in the wake of covid-19

June 30, 2020 Coronavirus (Covid-19), Headline News No Comments

The road, less travelled: Global Business Barometer shows business leaders want Government to continue limitations on international travel 

  • The most popular government action to help the economy and business recover, receiving 51% of responses, was to limit international travel
  • The last Global Business Barometer ranked limiting international travel towards the bottom in April, showing a huge swing in Executive sentiment 
  • Executive sentiment about the three-month outlook for the global economy rose but remains pessimistic at -27.7 (out of a range of -50 to +50)

There are three broad stages to recovery from the kind of crisis we are experiencing now: survival, adaptation and recovery. The latest Global Business Barometer, conducted by The Economist Intelligence Unit and supported by SAS, shows that as of late May executives believe we are still in the survival phase, although many have made adaptations to their operations, some of which may become permanent. 

The road, less traveled: When asked what actions they would like to see governments take in the coming months to get the global economy and businesses back on track, “limit international travel” surged to the number one answer (51%) after ranking towards the bottom in our last GBB survey. This put it ahead of other options such as direct fiscal stimulus to consumers and tax cuts. Now that travel restrictions have been demonstrably effective in many instances against the spread, we see a mix of resignation and adaptation amongst executives on the issue. 

Teleconferencing services, though imperfect substitutes and not without issues, have proven to be enough for ensuring business continuity, so much so that a large number of firms are offering employees the ability to work from home indefinitely. In addition, road-weary executives report finding lighter travel schedules liberating, perhaps indicating that fewer business trips will prove a persistent trend.

Less pessimistic: The barometer reading for the 3-month outlook for the global economy rose 11.7 points from -39.4 to -27.7, a marked improvement from the first GBB in April but indicative of a recovery that could remain a long way off. Sentiment in Europe increased the most (from -40.5 to -27.3), followed closely by the Asia-Pacific and North America. Sentiment about the global economy among executives in the Middle East and Africa region, while still up, increased by only 6.9 points, the least among the five regions covered by the barometer.

Sentiment in China falls: The biggest single swing in the barometer from April to May came in China, where the 3-month outlook for the economy fell by 21.9 points. At the time of the first GBB in April, China looked to be over the worst of covid-19 (or at least the worst of the first wave). That has clearly since changed, with the mood souring considerably on widespread downgrades to China forecasts and the Chinese government abandoning its annual GDP target for the first time in decades.   

Coming to grips: There was an uptick in the percentage of GBB survey respondents answering that the global economic recovery will take “3 to 5 years.” In April, the figure stood at 30.8%. In May it was at 37.2%. All other options more or less held steady. 

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