The coronavirus effect on global economic sentiment, April 2021
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Strategy & Corporate Finance Practice
The coronavirus effect
on global economic
sentiment, April 2021
Though the pandemic overshadows other risks to growth, optimism
about the economy persists and company prospects continue to
brighten, especially on the hiring front.
© liuzishan/Getty Images
April 2021In our latest McKinsey Global Survey on the economy,1 executives’ views are as decidedly positive as
they were in March—even as the pandemic continues to dwarf other risks to growth. It’s an especially acute
risk in India, where the week after the survey was in the field, the number of daily COVID-19 cases set a new
world record.2
Globally, 73 percent of all respondents believe that conditions in the world economy will improve in the
next six months. It’s the largest share to say so all year, while the share of executives expecting worsening
conditions has shrunk by more than half in the past three months: 10 percent say so now, down from
23 percent in January (Exhibit 1).
Web 2021
COVID-EconSentimentExec-Apr2021
Exhibit
Exhibit 1 of14
So far in
in 2021,
2021, executives’ outlook on
executives’ outlook on the
theglobal
globaleconomy
economyisisincreasingly
increasinglyrosy.
rosy.
Expected conditions in global economy, next 6 months,¹ % of respondents
Apr 12–16, 2021
Mar 1–5, 2021
13
Jan 11–15, 2021 13
Substantially better 7
57 60
Moderately better 49
12 9
Moderately worse 20 1
2
Substantially worse 3
Respondents who answered “the same” are not shown. Jan 2021, n = 1,025; Mar 2021, n = 1,018; Apr 2021, n = 1,199.
1
The domestic outlook is equally upbeat and consistent across regions (Exhibit 2), even outside of Greater
China3 or India—where, for eight surveys in a row, respondents were the most optimistic about their own
economy’s prospects. Notably, respondents in India reported the biggest shift in sentiment since the
previous survey. Though they are still more positive than not about their economy, the share expecting
improved conditions in the next six months dropped from 86 percent in March to 64 percent currently.
1
The online survey was in the field April 12 to April 16, 2021, and garnered responses from 1,199 participants representing the full range of
regions, industries, company sizes, functional specialties, and tenures. To adjust for differences in response rates, the data are weighted by
the contribution of each respondent’s nation to global GDP.
2
During the week of April 19, the number of new COVID-19 cases per day exceeded 300,000 in India. As of April 27, 2021, India has recorded more
than 5.7 million new COVID-19 cases in the month of April; Coronavirus world map: Tracking the global outbreak, New York Times, April 28, 2021,
nytimes.com.
3
Includes Hong Kong and Taiwan.
2 The coronavirus effect on global economic sentiment, April 2021Web 2021
COVID-EconSentimentExec-Apr2021
Exhibit 2 of 4
Exhibit 2
In every
In every region,
region,respondents
respondents report a positive outlook on their economies’
economies’
prospects.
prospects.
Expected economic conditions in respondents’ countries, next 6 months,1
% of respondents by region of office
North Greater Asia– Developing Latin
America China2 Europe India Pacific markets3 America
Better 85 84
70 64 63 60
50
Worse 5 1 14 16
26 21
29
1
Respondents who answered “the same” are not shown. North America, n = 276; Greater China, n = 123; Europe, n = 433; India, n = 87; Asia–Pacific, n = 133;
developing markets, n = 88; Latin America, n = 59.
2
Includes Hong Kong and Taiwan.
3
Includes Middle East, North Africa, South Asia, and sub-Saharan Africa.
The pandemic is an especially acute
concern in India, where 77 percent
now cite the crisis as a risk to domestic
growth. In the previous survey, only
28 percent said the same.
The coronavirus effect on global economic sentiment, April 2021 3As we saw in March, the COVID-19 pandemic continues to overshadow all other risks to domestic growth
and now tops the list in every geography.4 The pandemic is cited as a risk by 48 percent of all respondents,
while the second most common risk—unemployment—is cited by only 17 percent. It’s an especially acute
concern in India, where 77 percent now cite the pandemic as a risk to domestic growth; in the previous
survey, only 28 percent said the same, and unemployment was the most common risk then.
When asked about all potential risks to growth that executives foresee, there are some regional differences
of note (Exhibit 3). Respondents in developed economies are more likely than their peers to cite the
pandemic (65 percent, versus 55 percent), as well as asset bubbles, high levels of national debt, and
supply-chain disruptions. At the same time, concerns over insufficient government support, unemployment,
inflation, and weak demand are more top of mind in emerging economies.
Web 2021
COVID-EconSentimentExec-Apr2021
Exhibit 34
Exhibit 3 of
Executives’ views on potential
potential risks
risks to
to growth
growth vary across emerging and
vary across
developed economies.
developed economies.
Potential risks to growth in respondents’ countries, Emerging Developed
next 12 months,1 % of respondents economies² economies³
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
COVID-19 High levels Supply-chain Asset Unemployment Inflation Weak Insufficient
pandemic of national disruptions bubbles demand government
debt support
1
Out of 18 potential risks that were offered as answer choices.
²Includes China, India, Latin America, Middle East, North Africa, South Asia, and sub-Saharan Africa.
³Includes developed Asia, Europe, and North America.
On the company front, expectations for consumer demand continue to improve, and those for profits
remain buoyant. Workforce expectations are on the rise as well, with 43 percent of respondents saying their
companies’ head count will increase in the next six months. It’s the first time since the pandemic began that
a plurality of respondents have said so, in a mostly steady rise since our June 2020 survey (Exhibit 4).
4
In the March 2021 survey, the COVID-19 pandemic was the most cited risk to growth in respondents’ countries in every region but India
(“unemployment”) and Latin America (“domestic political conflicts”).
4 The coronavirus effect on global economic sentiment, April 2021Web 2021
COVID-EconSentimentExec-Apr2021
Exhibit 44
Exhibit 4 of
For the
For the first
first time
time since
since the
the pandemic
pandemic began,
began,aaplurality of respondents
plurality of respondents predict
predict
that their
that companies’ head
their companies’ head counts
countswill
will increase.
increase.
Expected changes in
company’s workforce 19
or department size, 29 34 31 37
next 6 months,¹ 43 Increase
% of respondents
42
41
44 47
47
42 Stay the same
39
30
21 19
16 16 Decrease
June Sept Dec Jan Mar April
2020 2021
1
Respondents who answered “don’t know” are not shown, so figures may not sum to 100%. June 2020, n = 2,222; Sept 2020, n = 1,138; Dec 2020, n = 1,382;
Jan 2021, n = 1,025; Mar 2021, n = 1,018; Apr 2021, n = 1,199.
The survey content and analysis were developed by Alan FitzGerald, a director of client capabilities in McKinsey’s New York
office; Vivien Singer, a capabilities and insights expert at the Waltham Client Capabilities Hub; and Sven Smit, a cochair and
director of the McKinsey Global Institute and a senior partner in the Amsterdam office.
Designed by McKinsey Global Publishing
Copyright © 2021 McKinsey & Company. All rights reserved.
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