Economic conditions outlook, March 2026

Executives ended 2025 with more optimism about the economy than they had all year. Those findings changed substantially, however, amid rising geopolitical tensions, according to the first quarterly McKinsey Global Survey on economic conditions of 2026.¹The online survey was in the field from February 25 to March 6, 2026, and garnered responses from 920 participants in 80 nations representing the full range of regions, industries, company sizes, functional specialties, and tenures. In this report, we focus primarily on the 607 respondents who completed the survey on or after February 28, and we report the findings separately for the 313 respondents who completed the survey on February 25 to 27. To adjust for differences in response rates, the data are weighted based on each respondent’s nation, taking into consideration its contribution to the region’s share of the global GDP (based on purchasing-power parity).

McKinsey Global Surveys have tracked executive sentiment on the economy since 2008. From time to time, we catch major disruptions while the survey is in the field—for example, the early international spread of COVID-19 and the closure of a bank. Such was the case with this latest survey: In the first few days after the survey launched, respondents were as upbeat as they had been in late 2025. But geopolitical tensions escalated in the Middle East on February 28,²“US and Israel launch ‘pre-emptive’ attack against Iran,” Reuters, February 28, 2026. and respondents began to see geopolitical conflict as the top risk to not just the global economy but also to their countries’ economies and their companies’ performance. Optimism about the global economy and domestic economies faltered, though expectations for company growth remained primarily positive.

In this quarter’s update, we treat the responses received after the geopolitical conflict began—which were more pessimistic than those collected in the first few days in the field—as our primary data set.

Geopolitical instability overshadows all other perceived economic risks

Even in the days preceding February 28, respondents most often pointed to geopolitical instability or conflicts as the biggest risk to global economic conditions, which was also true in the December 2025 survey. Seventy-two percent of respondents cite it as one of the biggest global economic risks, up sharply from 51 percent in December (Exhibit 1).³Both before and after February 28, about seven in ten respondents pointed to geopolitical instability and conflicts as one of the biggest risks to global economic conditions. The share of respondents pointing to energy prices as a risk increased after February 28, and prices appear among the top three most-cited risks for the first time since late 2023. Similarly, the share citing supply chain disruptions—which wasn’t a commonly cited risk in the previous two surveys—doubled after February 28.

The share of respondents citing geopolitical instability as a top risk to their countries’ economies has surged as well and is now the largest since early 2025. It is the most-cited risk in every region.⁴Before February 28, the trade policy and geopolitical instability answer choices had nearly the same shares selecting them.

Energy prices are among the top five domestic risks for the first time since mid-2023. However, that was true only for the responses coming in on and after February 28. For the first few days the survey was in the field, respondents were about equally likely to cite geopolitical instability and trade policy changes, and energy prices weren’t a top risk (Exhibit 2).

The respondents’ expectations for their companies remain primarily optimistic. Just over half of private sector respondents expect demand for their companies’ products or services to increase in the next six months, similar to last quarter. About six in ten expect profits to grow, consistent with the past two quarters.

However, geopolitical instability is now the most-cited threat to company growth for the first time since March 2025—though before February 28, respondents were about equally likely to cite trade policy changes, geopolitical instability, weak customer demand, and increasing industry competition (Exhibit 3). Geopolitical instability has also become one of the top five topics that respondents say are current priorities for their companies’ leaders, overtaking trade policy concerns.

Confidence in economic conditions ebbs

Overall, a larger share of respondents than last quarter say global conditions declined in the past six months (Exhibit 4).

Expectations for the months ahead also leaned more positive than negative in the first few days in which the survey was in the field, but they ultimately turned much more pessimistic than last quarter’s findings.

Views of specific countries’ current conditions are steadier. Overall, respondents’ assessments of current domestic economic conditions are in line with last quarter’s, with roughly equal shares reporting improvement, worsening conditions, or no change from six months ago.⁵While assessments were slightly more negative on and after February 28, 2025, they were not significantly different using a 95 percent confidence interval. Respondents in Europe and North America are the most likely to report worsening economic conditions over the past six months (which was also true throughout 2025), while those in Asia–Pacific, Greater China, and India lean more positive than negative.

Looking ahead to the next six months, respondents share more cautious expectations for their home economies than they did last quarter, when optimism outweighed pessimism. Respondents are now equally likely to expect improvement or deterioration. Thirty-six percent of respondents expect worsening conditions in their countries, up from 28 percent last quarter. In most regions, expectations are similar to those from six months ago, before an optimistic turn in December (Exhibit 5). Respondents in Europe and North America remain the least likely to expect improvement.