Global Businesses Favour Investment Over Cost Cutting to Aid Recovery

The boom in economic confidence in China continues, with 83% of senior executives more confident now than at the beginning of the year, compared to just 29% in the USA.

LONDON, September 2, 2010 - One in four senior executives across the globe is less confident now than
at the beginning of the year, according to an international study of economic
recovery published today Thursday 2nd September. However, the mood varies
greatly from country to country. Pessimism is most pronounced in the USA,
where confidence levels have dropped since the beginning of the year, while
optimism in the East continues to soar.

The research, conducted by international law firm Eversheds, reveals that
businesses in the USA have buried their heads in the sand, taking the least
proactive approach to combating the challenging economic climate. Conversely,
businesses in China and Russia have led the charge in trying to drive demand,
by searching for new market opportunities.

China is also leading the way in international expansion, with almost
three quarters of those surveyed looking to expand into at least two foreign
markets in the next 12 months, while just 18% of companies in the USA are
seeking out international opportunities.

Eversheds' Tools for Recovery report, which captures the views of more
than 1000 senior business figures across China, the USA, Europe and the
United Arab Emirates (UAE), also reveals signs of a revival in global mergers
and acquisitions activity. One in five businesses (22%) said they would be on
the acquisition trail in the year ahead, up from 13% in the last 18 months.
Again, Russia is leading the way with 42% of businesses looking at
acquisitions in the next 12 months.

Looking ahead, the research shows that businesses will continue to drive
demand and will also have a stronger appetite to invest in three key areas -
staffing levels, marketing activity and research and development projects.

This follows some tough decisions during the last 18 months, with 46% of
businesses cutting discretionary spending, 38% freezing or reducing pay and
34% making redundancies. Job losses during this period have been most
prolific in the USA, France and the UAE.

Stephen Sorrell, partner at Eversheds, said:

"While economists have signalled the official ending of the recession,
there is little doubt that challenging economic conditions persist. Despite
the downturn of the last few years, the majority of companies have survived
and some have even thrived. The question is how? Through this research, we
wanted to identify the steps that businesses across the globe have taken to
stay ahead and the plans they have in place to recover and grow.

"The findings show a very mixed picture in terms of confidence levels and
the way in which businesses have tackled the challenging economic climate.
The apparent inertia in the USA is quite surprising, while there are
encouraging signs of a general trend towards reducing cost-cutting measures
in the year ahead and a greater desire to invest and focus on growth.

"Our research also noted some differences across the sectors. It's really
encouraging to see that the manufacturing industry is among the most
optimistic, while the construction sector, which was arguably the hardest hit
by the global recession, has a healthy level of optimism in line with the
global average - perhaps a sign that they have turned the corner."

Notes to editors

About Eversheds

Eversheds LLP and its world wide offices have over 3,500 legal
and business advisers providing services to the private and public sector
business and finance community. Access to all these services is provided
through 44 international offices in 26 jurisdictions. Eversheds combines
local market knowledge and access with the specialisms, resources and
international capability of one of the world's largest law firms.

www.eversheds.com

    Lucy Sulkin
    For Eversheds International
    International Dial : +44-(0)207-919-0683
    E-mail: lucysulkin@eversheds.com

Lucy Sulkin, For Eversheds International,
International Dial : +44-(0)207-919-0683, E-mail: lucysulkin at eversheds.com