Business sentiment is retreating fast as supply chain disruptions, tariff uncertainty, and weaker global demand force companies to retrench. New data from Dun & Bradstreet signals not only a sharp drop in optimism but a broader reordering of investment, sourcing, and financial strategies across sectors and geographies.
Manufacturing Hit Hard as Trade Risk Grows
Dun & Bradstreet’s latest Global Business Optimism Insights report shows business confidence falling to its lowest point since late 2023, with a 6.5% drop in the Global Business Optimism Index this quarter. That follows consecutive declines in Q1 and Q2, revealing mounting pressure on global firms navigating a complex web of geopolitical risk, trade friction, and sluggish demand recovery.
The impact is most visible in manufacturing, where sentiment dropped 8.3%, far steeper than the 5.4% decline in services. Segments most exposed to trade dynamics, metal manufacturing, automotive, and capital goods, saw disproportionate pressure. Firms producing discretionary goods such as textiles and electricals also reported significant margin compression, with optimism plunging 17% and 15%, respectively. Across the board, companies are struggling to maintain profitability amid high input costs and waning pricing power.
Trade tensions remain top of mind. Over half of respondents expect no relief or further escalation, while just 46% foresee de-escalation via diplomatic efforts. This uncertainty is driving a pivot inward: 34% of businesses now cite domestic market growth as their main hedge against tariff shocks. Meanwhile, global supply chain confidence fell another 9.7%, an 18.6% slide year-to-date, highlighting the systemic nature of today’s logistics challenges.
Financial Confidence Wanes Despite Rate Cuts
While many central banks have lowered interest rates, cheaper borrowing hasn’t translated into stronger confidence. The Global Business Financial Confidence Index dipped 3.4%, with only 60% of firms expecting improved funding conditions, down from nearly 70% last quarter. Working capital strain is also building: fewer than half of businesses now expect to receive timely payments, a sign that liquidity pressures are creeping deeper into B2B trade cycles.
The Global Business Investment Confidence Index dropped 13.1%, marking a third consecutive decline. Even among firms still planning to raise long-term funds, 55.4%, down from 70%, many are simultaneously deleveraging and delaying capex to prepare for long-term volatility. The search for alternative markets is also shifting. Just 5% of companies see the Chinese Mainland as their primary fallback, while 23% favor the EU and 15% look to non-China Asia, suggesting that political risk is overtaking cost efficiency in market prioritization.
On the ESG front, sentiment held steady overall, but diverged sharply across company sizes and regions. Medium-sized firms in emerging markets reported progress, while large firms in advanced economies experienced an 8.4% drop in ESG sentiment, likely due to tightening disclosure rules and rising compliance fatigue. Globally, ESG remains a secondary supplier selection criterion, still trailing cost and geopolitical risk.
Business Resilience May Demand More Than Diversification
While strategies like nearshoring and multi-sourcing are gaining ground, they may not be enough to weather the next wave of shocks. Dun & Bradstreet economists caution that agility now depends on dynamic credit exposure monitoring, payment behavior analytics, and a real-time view of supplier dependencies. As tariff regimes shift and liquidity tightens, companies that build financial and operational transparency into their supply chains will be better positioned, not just to adapt, but to compete.
