Interesting detail in MS's pan-European equity analysts’ macro survey:
Our main takeaways from this first survey are, first, that Corporate Europe is undergoing heavy restructuring and, second, that deflation is already widespread for large corporations. Let’s get into the details and add some sectoral colour to the picture.
As for business conditions, the balance of opinion -- that is, the net percentage of observations pointing to an improvement versus a worsening -- came out clearly negative at minus 40%. Half of our sample considered that they were unchanged, compared to the previous quarter. Within the other half, only one sector, media/entertainment/publishing, indicated some improvement. For capex plans, a majority of companies are reported to intend to cut them, the balance of opinion standing at minus 30%. Stability was more pronounced than for business conditions (60%). Only the retail sector indicated an upgrade of its capex plans.
For headcounts, an overwhelming 70% majority mentioned intentions to cut payrolls further, the balance of opinion standing at minus 68%. Only the healthcare products sector appeared ready to hire employees. Interestingly, the technology sector seems to have already undergone the bulk of its restructuring.
Source: Morgan Stanley Global Economic Forum
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