According to a survey by Grant Thornton, the professional services group engaged in audit, tax and advisory services, 46 per cent of companies globally expect an uplift in their revenues over the coming year — an increase of 11 percentage points in the number making this prediction in the first quarter of 2016.
Globally, businesses based in Africa, Latin America and the Mint economies — of Mexico, Indonesia, Nigeria and Turkey — are the most optimistic on this measure.
When asked about profitability, 36 per cent of the businesses said they also expected an improvement.
Francesca Lagerberg, global leader for tax services at Grant Thornton, said businesses were putting themselves in a “precarious situation” by being over-reliant on domestic spending to boost growth.
With wage growth slowing, oil prices beginning to rise again and increased political uncertainty — notably following the UK’s decision to leave the EU, consumer confidence could also take a hit, Grant Thornton noted.
Nearly half of all companies worldwide expect their sales to rise in the next 12 months — but they are relying on domestic consumer spending rather than robust exports to fuel growth the Grant Thornton’s survey results show.
It will be interesting to see how this optimism plays out against the backdrop of slowing GDP growth and elevated inflation in Nigeria.
Nairametrics believes investors should probably still stick to the best in class stocks with earnings generating power.