Worldwide corporate sentiment has dropped the most in 2018 since 2014, with the Fidelity sentiment index measuring at 0.6 globally and -0.4 in China, according to a survey conducted by Fidelity International, reported the South China Morning Post.
The Fidelity survey began in 2014 and aggregates management confidence, capital expenditure, dividend policy, return on capital and balance sheets. Neutrality is set at 0, with a positive score indicating buoyant sentiment and a negative score signifying pessimism.
“This year’s pessimism has two core drivers, a weaker consumer and increasing costs of doing business; both of which threaten to squeeze profit margins in 2019,” said Michael Sayers, equities research director at Fidelity.
Fidelity attributed China’s negative index to the ongoing US-China trade war and the affects of Chinese consumers’ uncertainty about wage growth on consumer habits.