European partner confidence fell sharply in the fourth quarter, with the index remaining barely in the “fair” range. Confidence fell not only in the areas partners control (hiring, sales, profitability, and reinvestment) but also in the areas they don’t (interest rates, inflation, regulation, and economic policy).
Fortunately, partners still expect to grow revenue and profit, though with less conviction than a quarter ago, and they’re less certain that they can fund reinvestment and keep their competitive edge. Confidence in their ability to adapt remains strong, suggesting a belief that they can cope even as they lose confidence in external conditions.