US firms see lag in host countries

Business executives who are in charge of the overseas divisions of US companies feel the next 12 months will likely produce an economic decline in their host countries, a sampling of opinion by the US Chamber of Commerce's Survey Research Center shows.

Executives heading American subsidiaries abroad say there is a 47 percent probability of recession in the countries where such operations are. This is a 10- percentage-point increase since the survey taken six months ago. Results represent a scientific sampling of 1,463 executives in almost 90 countries around the globe.

Their views are in contrast to executives in this country. In the latest quarterly chamber survey of business leaders in the United States, taken in July , executives in this country assigned a 54 percent chance of recession within the nest 12 months, down from 69 percent six months earlier and considerably lower than the 73 percent assigned a year earlier.

Declining confidence of executives abroad could have an adverse effect on the nation's domestic economy. The recovery from the recession in the US could be slowed not only by high inflation and high interest rates domestically but also by a general slowdown in economic growth in the economies of major industrial trading partners.

Questioned as to the possibility of foreign governments adopting added protectionist measures to limit imports, a majority of respondents (55 percent) felt it unlikely that their host country governments would take such action. At the same time, their views about increased trade tend to be optimistic: A clear majority see the volume of trade between their host countries and their chief trading partners either increasing (36 percent) or remaining about the same (45 percent). Only 16 percent expect a decline in trade volume during the next 12 months.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.