Austerity splits European views on economic outlook
A recent Pan-European investor sentiment survey conducted by Schroders revealed that investors from countries with the lowest needs for fiscal austerity are the most optimistic about their own country’s economic outlook and also the global economic outlook for 2011.
Schroders’ survey of 2,200 high net worth investors across ten European countries shows that investors in Italy, Spain, UK and France, which have some of the highest fiscal austerity needs across Europe, are the least optimistic about the domestic and global economic outlook in 2011. However, they become more aligned with the rest of Europe on the domestic and global outlook over five and ten years.
In contrast, investors in Sweden, Switzerland and Germany, which have some of Europe’s lowest fiscal austerity needs, are the most optimistic about the outlook of their domestic economies as well as the global economy this year.
Interestingly, the survey revealed that Europe’s view on the economic outlook for the Eurozone becomes less aligned over time and that the level of fiscal austerity needs does not necessarily determine the outlook. While Europe is broadly aligned for 2011, Spain, Italy and Belgium are the most optimistic and the UK and Switzerland are the most pessimistic over five years and ten years.
Azad Zangana, European Economist at Schroders, commented:
“The results from the survey show that confidence is very low and that there is a clear relationship between confidence in investors’ domestic market and the global economy. Investor optimism appears to be lowest in countries that have the greatest need for fiscal austerity, such as Spain and the UK, and this appears to strongly influence their global outlook. There is however growing confidence amongst European investors and despite the risks of Greece restructuring its sovereign debt, investors remain positive over the longer term.”
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Notes to Editors
The Schroder Pan-European Investor Survey was conducted as an online poll by FTI, during May 2011 among a targeted sample of 2200 high net worth investors over 18 years of age and holding a minimum £30,000 (€50,000/ CHF50,000/ Kr300,000) in investable assets. The research was conducted to analyse the investor sentiment of High Net Worth Individuals across 10 countries in Europe: Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland and the UK.
Schroders is a global asset management company with £201.4 billion (EUR 227.5 billion/$322.8 billion) under management as at 31 March 2011. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
With one of the largest networks of offices of any dedicated asset management company, we operate from 32 offices in 25 countries across Europe, the Americas, Asia and the Middle East. Globally we employ over 300 portfolio managers and analysts covering all the major investment markets. We offer our clients a comprehensive range of products and services.
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