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CoreNet Global Index Predicts Upbeat Economic, Corporate Climates for Second Half of 2013

Posted by Heidi Schwartz

The global economic outlook is strong for the second half of 2013, while the prospects for corporate growth and expansion are also increasing, according to the views of corporate executives surveyed in June for the new CoreNet Global Confidence Index, developed in conjunction with Dr. Roy Black, Director of the Real Estate program at Emory University’s Goizueta Business School in Atlanta.

The index is a new macro-economic measure based on the viewpoints of corporate real estate (CRE) executives serving large, multinational companies from multiple industry sectors. The first index rating is 4.65, based on a scale of 7 with 7 representing an extremely optimistic environment. Professor Black, who led the design of the Confidence Index model, characterized its first outcome as “a classic case of corporate economic resiliency following the challenging overhang of 2009.”

According to the predictive survey, nearly two-thirds (62.5%) rated their outlook on the global economy for the coming six months as optimistic to very optimistic, compared to a year ago. Almost one-third (31.3%) were neutral on the question, with only incremental pessimism registered (4.2%).

By contrast, the World Gross Product measure of all economic growth globally shows a flat-line trend of +2.3% from last year to this year. It also projects an increase to +3.1 for 2014, making the CoreNet Global index trend a possible harbinger of future growth. In a similar way, a July 9 International Monetary Fund report cited by CNN characterized the global economy as “stuck in neutral.”

Still, executives in the CoreNet Global survey ascribed even higher confidence levels to the likelihood of their companies’ growth for the second half of 2013. A strong majority rated their confidence levels in the prospects for business expansion as optimistic (54.2%), very optimistic (14.6%), and extremely optimistic (4.2%).

The index methodology is informed quarterly by the direct polling of nearly 90 CoreNet Global Corporate Partners, comprised of an economically diverse mix of multinational companies representing the following sectors: aircraft and aerospace; automotive; business services and consulting; consumer goods; distribution and logistics; education; energy; petroleum and mining; financial services; government; health care; hospitality and entertainment; insurance; life sciences and pharmaceuticals; manufacturing and industrial; media; real estate; retail; software; technology; telecommunications; transportation and utilities.

Corporate Partners manage real estate portfolios that typically range between two million square feet and 110 million square feet globally. The types of real estate managed are office space (84.8%); industrial (34.8%); laboratories (32.6%); research and development (32.6%); data centers (39.1%); retail (26.1%); and others including mixed use development (19.6%).

 

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About The Author

Schwartz joined Group C Media in April 1989 as managing editor of Today's Facility Manager. In September 2012, she transitioned to a new role dedicated to developing online content for Business Facilities and Today's Facility Manager. Schwartz can be reached at [email protected]

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