Grant Thornton's International Business Report (IBR) reveals the level of optimism about the economy and business in the next 12 months. The semi-annual survey was conducted in 28 countries with about 4,600 middle-market business leaders.

In this first edition of the International Business Report of 2022, 57% of Brazilian business leaders revealed optimism about the future of business. This index caused Brazil to fall four positions in the global ranking, going from 13th to 17th place compared to the immediately preceding semester, when optimism was 62%.

The increase in positive expectations of entrepreneurs was observed in less than half of the countries surveyed, whose leadership was with Vietnam (88%), followed by Australia (83%) and the United States (81%).

In Latin America, the optimism index over the next 12 months was 55%, while the global index was 64%.

IBR: Check the methodology applied

Main indicators of optimism

Turnover and revenue growth

Despite the drop in the ranking, confidence in revenue growth and an increase in turnover among Brazilians jumped 6 p.p. to 82%, an index that puts the country in third place in this item, behind Indonesia (87%) and Vietnam (85%). Latin America appears with 72% and the global index was 58%.

The profitability item followed the same positive line, with 82% of Brazilian entrepreneurs confident in its increase. At the top appears Vietnam (87%), followed by Brazil (82%) and Nigeria (81%). Latin America, at 65%, was well above the global index of 54%.

Employability and training

Regarding the number of jobs, Brazilians are the ones with the highest growth expectation for the next 12 months. With an index of 76%, 3 p.p. above the previous result, Brazil takes the lead in this item, followed by Vietnam (71%) and India (70%). It is worth mentioning that in the first half of 2020, with the arrival of the covid pandemic, the country presented one of the lowest expectations, of only 46%.

Investments in team skills continue to rise in the country, confirmed by 78% of entrepreneurs, against 75% in past research. Thus, Brazil and Nigeria, with the same index, were second only to Indonesia, with 79%, and followed by India, with 76%. The Latin American index was 62% and the global average was 55%.

Investments in R&D

Respondents also highlighted investments in research and development for the next 12 months. Brazil reached the index of 76% of those who intend to invest more, compared to 74% in the second half of 2021. In the global ranking, the country maintained the second place – tied with India –, behind Nigeria, with 79%, and ahead of Vietnam, with 74%. The global average stood at 55% and Latin America at 60%.

Information Technology

The Information Technology sector has also been gaining prominence with each edition of the research. Of the Brazilian entrepreneurs consulted, 81% said they will invest more in the next 12 months. In the annual average of previous surveys, the index was 70% in 2020 and 76% in 2021, against 64% in the pre-pandemic covid period in 2019.

Aspects limiting business growth

For Brazilian business leaders, the main obstacles are economic uncertainties (58%), lack of qualified professionals (51%), lack of financing (41%), and transport infrastructure (40%).

The issue of wages continues to show a great distance between expected increase and real increase, especially in Brazil. Responses to wage growth expectations showed very high rates: 97% in India, 93% in South Africa, 91% in the United States and 75% in Brazil. But, for the expectation of a real increase in wages, the indexes plummeted. Only 9% of Brazilian respondents believe in this possibility, compared to 15% in the previous survey. The most optimistic entrepreneurs are those from India (51%), Turkey (42%) and the Philippines (36%).

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According to Daniel Maranhão, CEO of Grant Thornton Brasil, the decrease in results after a sequence of growth after the most critical phase of the pandemic may be related to external factors. “It was most likely a reaction to the fear of the economic impacts that could be caused by Russia's invasion of Ukraine, which were not yet clear in the data collection phase of the survey. Added to this is the rise in inflation and interest rates, in addition to the risk of recession in several countries, which may interfere with companies' strategic plans. "

For the executive, in Brazil, despite the fall of optimism with the economy in the next 12 months, the interviewees were confident in important issues, such as increased turnover and revenue growth, which shows greater autonomy of companies in relation to the economic direction of the country, especially in the election year.

"Despite the increase in inflation and the reduction in financing from government sources, with more competitive interest rates, Brazilian entrepreneurs remain confident in the continuity of the growth of their businesses, signaling that the restructuring imposed by the pandemic, with the search for greater productivity and conquest of new markets, were well founded and should give good results."

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The International Business Report (IBR) is published every six months by Grant Thornton and provides relevant information for the competitiveness of middle-market companies. We will also publish additional information from our survey throughout the year.

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