Global business confidence slumps in October

<p>Global business confidence hit a five-year low in October.</p>

Global business confidence has fallen to a five-year low, according to new figures.

The Markit Global Business Outlook index, which surveyed 6,100 companies across the world, showed another decline during October. It found that the number of firms which expect business activity to be higher in the coming exceeded those which were bracing for a decline by 28 per cent. However, the net balance was 39 per cent lower than it was in June and had not reached this level since the survey began in 2009.

Growing uncertainty across the globe has been triggered by a number of high profile economic downturns. Germany, regularly regarded as one of the powerhouses in the European financial sector, saw its business confidence fall to a two-year low during October. The Info think tank's Business Climate Index dropped from 104.7 in September to 103.2 the following month, highlighting a deterioration in Germany.

Europe's largest economy only narrowly avoided falling into recession. Germany saw its economy shrink by 0.1 per cent in the second quarter of the year and would have hit trouble had it done the same in the third quarter. However, it grew by 0.1 per cent in Q3 and helped to boost the eurozone by 0.2 per cent during the same period.

Despite nations like Germany and France performing better in recent weeks there is still concern across the globe which has been highlighted by the slump in business confidence.

Chris Williamson, Markit's chief economist, said: "Clouds are gathering over the global economic outlook, presenting the darkest picture seen since the global financial crisis. Companies' hiring and investment intentions have both fallen to post-crisis lows alongside the bleakest outlook for future business activity seen over the past five years."

Mr Williamson highlighted the disappointing performance of major emerging market economies as one of the reasons why economic growth has been stunted in recent years.

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