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Businesses face increased risks amid geopolitical tensions and economic challenges, impacting investment outlook

LONDON, April 10, 2025 /PRNewswire/ -- Dun & Bradstreet (NYSE: DNB), a leading global provider of business data and analytics, today released its quarterly 2025 Global Business Optimism Insights report, revealing a 1.3% quarter-over-quarter decline in business optimism, following a sharp 12.9% drop seen in the prior quarter. Persistent global economic uncertainty and rising trade protectionism continue to dampen global business sentiment.

While financial confidence dropped 8.6% amid challenging business conditions, optimism levels for supply chain continuity were flat. Further, investment optimism declined reflecting continued uncertainty over the pace of rate cuts in 2025.

"In the face of macroeconomic uncertainty, rising capital costs, and a weakening growth forecast, businesses remain apprehensive about the global economic landscape and cautious about investment," said Neeraj Sahai, President of Dun & Bradstreet International. "The reshaping of trade relationships and tariff uncertainty contributed to over 90% of the economies surveyed reporting a decline in their financial confidence index, in both emerging and advanced economies. Cost expectations remain elevated, especially in the economies most exposed to tariff hikes."

Export-driven sectors such as automotives, electricals, and metals saw sharp declines in business optimism, particularly in the U.S., Mexico, South Korea, and Japan, where rising tariffs and shifting trade policies have resulted in cost pressures and demand volatility. Financial risk perceptions remain elevated as businesses continue to deal with high borrowing costs amid tightening liquidity conditions and persistent inflation expectations. Globally, the perception of financial risk on business balance sheets has increased, with optimism levels falling 6% quarter-over-quarter.

Key findings from the Q2 2025 report:

• The Global Business Optimism Index further declined 1.3%, following a sharp 12.9% decline in the prior quarter. Sentiment across emerging economies held steady, with the decline driven by advanced economies where optimism fell 1.7%. However, a resurgence of inflation is viewed as being disruptive, with 86% reporting it would significantly affect operations.
  o  Tighter domestic monetary policy is seen as a significant risk by businesses globally, with 70% considering it highly probable and 83% expecting a material impact.

• The Global Supply Chain Continuity Index remained flat following a sharp decline of 10.7% last quarter. The overall stagnant optimism is attributable to the persistent supply chain disruptions, labour shortages, the ongoing challenges of adjusting to evolving global trade dynamics, and heightened tensions surrounding U.S. tariffs.
  o  Globally, there is a noticeable drop in optimism about delivery lead time, which declined 7.8% quarter-over-quarter with the fall slightly larger at 9.5% for advanced economies.

• The Global Business Financial Confidence Index declined 8.6%, reflecting a business landscape clouded by macroeconomic uncertainty, the ongoing high cost of capital, a softening growth outlook, and the reshaping of trade relationships.
  o  Confidence declined across all business sizes, with large businesses being the most impacted. U.S. businesses particularly cite the potential impact of an inflation resurgence and tighter domestic monetary policy as top risks.

• The Global Business Investment Confidence Index fell by 0.6%, reflecting increased uncertainty around the pace of interest rate cuts in 2025.
  o  69% of businesses reported optimism for capital expenditures, a fall from 77% in last quarter and 84% in Q4 2024. This drop off in confidence is largest for the metals and mining manufacturing sectors, which are the most exposed to the U.S. aluminium and steel tariffs.

• The Global Business ESG Index declined 3.3%, marking the first drop after three consecutive quarters of growth, a result of declining engagement in social and governance initiatives.
  o  While 77% view climate change and environmental risks as significant, only 58% believe they are highly probable.