Global Executives are Turning More Optimistic for 2026

The tone going into 2026 is shifting. After a year where companies spent more time watching macro headlines than taking decisive bets, McKinsey’s December 2025 economic conditions survey shows something different: executives are becoming more confident about the near-term business environment, and priorities are consolidating around two ideas that are easier to act on than “the macro” ever was. One is customer demand. The other is technology investment, with AI sitting at the center of the spend conversation.

For India, this is useful for one reason. India’s businesses and investors often get caught between global risk narratives and local growth reality. This survey is a clean indicator of where global business leaders are actually placing their attention as the year turns, and where India can align with, or diverge from, that playbook.

The first signal is sentiment. McKinsey notes that respondents are ending the year “more optimistic” than at any point in 2025. That matters because corporate optimism influences whether budgets get loosened, whether hiring freezes persist, and whether investment committees move from “wait and see” to “deploy.”

That optimism shows up in forward expectations. In the private sector, 63% of respondents expect profits to increase over the next six months, the highest share since December 2024. Profit expectations tend to move only when leadership teams believe cost control is no longer the sole lever and revenue conditions are improving. Alongside that, 52% of respondents expect customer demand to increase in the next six months, a threshold McKinsey highlights because it is the first time in 2025 that demand expectations crossed the halfway mark. The implication is subtle but important: leaders aren’t just hoping conditions stabilise, they are increasingly positioning for a demand environment that is improving.

This is where India becomes relevant. In McKinsey’s regional breakout, India remains among the most optimistic regions on near-term domestic conditions. The second signal is the shift in what companies say they will do next. If 2023 and parts of 2024 were defined by post-shock repair, and much of 2025 by cost discipline, the emerging 2026 playbook looks like it is tilting toward growth investments again. In the same survey, AI and gen AI investment stands out as the most reported high priority, particularly in technology and services industries. It suggests that AI is moving from being framed as an experiment to being treated as a budgeted program, with clear ownership and internal expectations.

For India, that matters in two ways. First, it reinforces that the AI wave is not just a Silicon Valley narrative. Global companies are beginning to treat AI as a mainstream investment category. Second, it suggests the competitive bar is rising. When AI becomes a “most reported priority,” it stops being an advantage you get simply by participating. It becomes table stakes for productivity, customer engagement, and speed of execution.

It would be a mistake, though, to read this survey as “risk is gone.” The risk map has rotated. In the latest read, geopolitical instability re-emerges as the top perceived global risk. That point is critical for anyone trying to understand how confidence can rise at the same time as the world feels unstable. The answer is that executives are learning to operate in an environment where multiple risks remain present, but they are no longer willing to freeze decisions until those risks resolve. The risk premium does not vanish. It gets priced, and then business continues.

McKinsey also describes a change in perceived disruptions. Trade-related fears have cooled even as geopolitics dominates the risk conversation again. If geopolitics is the top risk, supply chains, energy, and currency volatility remain live variables. If trade-policy anxiety is cooling at the margin, there is still room for incremental improvement in business expectations tied to exports, cross-border investment, and global manufacturing rerouting.

The demand signal matters more than the sentiment signal. Executives can feel optimistic for many reasons, including relief that things aren’t getting worse. The important part here is that a majority expect customer demand to rise, and that is a measurable shift versus the rest of 2025. If you are a consumer-facing business, this is a reminder that the 2026 environment may reward companies that invest in distribution, pricing architecture, and product clarity, rather than only focusing on cost containment. If you are a B2B business, it is a signal that buyers may loosen budgets selectively, particularly where ROI is easy to justify.

India’s relative optimism is an advantage if it stays grounded. McKinsey’s regional breakout keeps India among the most optimistic markets on domestic conditions. That matters because confidence can become self-reinforcing when it drives investment, hiring, and consumption. But it also creates a temptation to ignore global risks. The more durable stance is to treat India’s optimism as a platform, not a prediction. It gives room to invest, but it does not eliminate the need to stress-test.

The broader point is that 2026 looks less like a year of macro obsession and more like a year of execution choices. McKinsey’s survey signals that leaders are leaning into demand expectations and prioritising AI investment at scale, while still recognising that geopolitical risk remains a core feature of the environment.

For India, the opportunity is to match that clarity without importing the wrong conclusion. Optimism is rising. Demand expectations are improving. AI is becoming a budget line, not a slide. And the world is still messy. The companies that do best in 2026 are likely to be the ones that accept all four statements at once and build accordingly.

Brand Manager

Aayushi Thakur

Frequently Asked Questions

Q: What’s the main shift in tone going into 2026, according to McKinsey?

A: Executives are closing out 2025 with more optimistic economic sentiment than earlier in the year, alongside declining focus on trade policy and greater confidence in company prospects.

Q: What are the two priorities leaders are consolidating around?

A: Customers (demand) and technology investment, with AI explicitly highlighted as central to where attention is going.

Q: What does the survey say about near-term demand expectations?

A: 52% of private-sector respondents expect customer demand to increase in the next six months, which McKinsey flags as the first time in 2025 that demand expectations crossed the halfway mark.

Q: What does it say about profit expectations?

A: 63% of respondents expect profits to increase over the next six months, the highest share since December 2024.

Q: What risk is back on top in this read?

A: Geopolitical instability and conflicts re-emerge as the most-cited risk, while trade-related changes remain a commonly cited risk but with reduced emphasis versus earlier quarters.

Sources

McKinsey