Dun & Bradstreet, a global leader in business decisioning data and analytics, has released its Q1 2025 Global Business Optimism Insights report. The survey, conducted in November 2024, found a 12.9% quarter-over-quarter decrease in the Global Business Optimism Index for Q1 2025. This decline reflects growing concerns regarding weak economic growth, rising geopolitical risks, and uncertainties around trade policies.
The shift from previously high optimism levels seen in the latter part of 2024 highlights a more cautious approach, especially in areas like supply chain stability and investment strategies. Speculation about changes in policies under the new U.S. administration also seems to have contributed to this dip in business optimism. Despite this, 30 out of 32 surveyed economies report optimism levels higher than those seen in Q1 2024, suggesting a correction from the high levels of optimism rather than a deeply negative outlook.
“Survey respondents have a guarded outlook for the quarter ahead due to the evolving economic and political landscape that may impact how the world does business,” said Neeraj Sahai, President of Dun & Bradstreet International. “Optimism levels for supply chain risks vary by business size. Larger businesses have shown increased optimism and resilience by leveraging economies of scale and sourcing alternatives, whereas medium-sized businesses have seen a 36% drop, highlighting their challenges in cross-country trade and local supply shortages.”
Key findings from the Q1 2025 report include:
- The Global Business Optimism Index fell by 12.9%, marking the first decline since the series began. All 32 surveyed economies reported a downturn, signalling rising uncertainty, geopolitical tensions, and sluggish growth. Despite this, over 90% of the economies are still showing optimism levels above Q1 2024.
- More than 80% of economies reported decreased optimism for new export orders, with nearly half facing significant trade exposure to the U.S. or China.
- The Global Supply Chain Continuity Index dropped by 10.4% following three quarters of improvement. Challenges like high freight costs, container shortages, and geopolitical disruptions contributed to this decline.
- Optimism among large businesses improved by 10.7% due to economies of scale and diverse sourcing strategies. However, 66% of medium-sized businesses reported lower optimism. Small businesses experienced a moderate 3.5% decline but remained optimistic about delivery times and supplier concentration, benefiting from local sourcing.
- The Global Business Financial Confidence Index decreased by 8.9%, reflecting economic uncertainty and weak demand. Smaller businesses were more affected, while large businesses saw an 8.3% increase in confidence.
- The Global Business Investment Confidence Index fell by 4.7%, though it remains 12% above the five-quarter average. M&A activity continues to show strength, with 78% of businesses anticipating favourable conditions.
- The Global Business ESG Index rose by 2.4%, underscoring companies’ continued focus on sustainability despite economic challenges. Notably, U.S. and EU responses showed varying approaches to sustainability budgets, particularly in automotive manufacturing.
“Businesses have entered 2025 with more subdued expectations for Q1, grappling with supplier risks and a declining ability to manage supplier concentration risk, said Arun Singh, Global Chief Economist at Dun & Bradstreet. While central banks are lowering interest rates, the cost of capital remains high, suggesting an elevated credit risk environment. This, combined with reduced optimism for sales and profitability, is adding to businesses’ cautious outlook.”