Europe more optimistic about economy but lags well behind the US

~ Poland and Germany most pessimistic about the economy

~ Eurozone countries among least optimistic in world

The first findings of the annual Grant Thornton International Business Owners Survey (IBOS), published today, show a growing optimism about economic prospects right across Europe. The survey is carried out in 26 countries worldwide including 12 countries in Europe. European countries, and in particular those in the Eurozone, still lag far behind the optimism in the US. Spain and the UK top the league table in being the most optimistic European countries with optimism/pessimism balances (*see note below) of +49%. Across all EU countries the balance has improved from -12% last year to +15% this year.

Although more optimistic than last year, Eurozone countries are much slowerin anticipating a recovery. Five out of seven Eurozone countries in the survey -Germany (-6%), France (+4%), Netherlands (+6%), Italy (+7%) and Ireland (+7%)-are in the top ten most pessimistic countries in the world. Poland (-32%),highly dependent on the German economy, comes bottom of the league.
Business owners were also asked about expectations for their own companies:

There is a strong expectation that profitability will rise next year with theoptimism balance almost doubling across the EU from +17% to +32%. In Europe,Greek business owners are the most optimistic (+59%) followed by the UK (+55%),Sweden (+49%) and Ireland (+42%).

Employment prospects are mixed across Europe according to the survey. Businessowners are optimistic in Turkey (+40%), the UK (+36%), and Greece (+33%)contrasting with continuing gloom in Germany and Poland (both -16%).

There is general optimism about selling prices except in one of the biggesteconomies - Germany at -4%. Russian business owners are most optimistic (+59%)followed by those in Sweden (+42%).

Michael Rogerson of Grant Thornton says: "After two years in the doldrums,European companies see better prospects ahead and there is a decent recoveryanticipated in profitability and investment. However, the Eurozone countries aregenerally less optimistic, particularly France and Germany. That reflects theexpected weakness, even next year, in Eurozone economic activity."

Worldwide, India tops the league table in being the most optimistic country withan optimism/pessimism balance of +83%, perhaps reflecting the current buoyantindustrial performance and a good monsoon season. India is followed by Australia(+81%), where the economy continues to be on an economic roll, and the US(+75%). This reflects the US economy doing spectacularly well with annualisedthird quarter growth of more than 7% at the time of the survey - the strongestfor 20 years. Structural economic problems have kept Japan at the bottom of thetable for a second year with a balance of -46%.

Notes to editors

The Grant Thornton International Business Owners Survey (IBOS) was carried outamong 6600 owners of medium sized businesses from 26 countries between 1September and 31 October 2003. IBOS began in 2002 and builds on the EuropeanBusiness Survey (EBS) which Grant Thornton ran for the previous ten years. Theresearch was conducted by Experian Business Strategies Limited and WirthlinWorldwide.

* the figure is the percentage balance of the respondents who are optimistic and those who are pessimistic