Business Survey

2019 Q3 Free Zones World Economic Barometer

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The results of the 2019Q3 round, conducted in mid-August, suggest that economic conditions in free zones around the globe have again deteriorated compared to the previous three months. The share of free zones reporting good economic conditions fell from 47 percent in 2019Q2 to 34 percent. 58 percent of free zones evaluate their current situation as normal, while the share of free zones experiencing poor conditions has increased slightly from 7 to 8 percent. This translates into an F-WEB Economic Conditions Index of 26, down from 40 in 2019Q2 and 51 in 2019Q1. Thus, the F-WEB indicator has dropped close to its lowest level since its launch. Expectations for the next three months have also become less optimistic. In 2019Q3 the indicator for expectations regarding future economic conditions continued the downward trend that is in place since summer 2018 and recorded a new low since the start of the F-WEB.

In the second quarter of 2020, the world is severely affected by the COVID-19 pandemic, and so are Free Zones around the globe. This is the result of the 2020Q2 F-WEB survey conducted in May 2020. The global crisis hit at a time when economic sentiment in Free Zones had been on an upward trend. However, due to the pandemic and measures taken to contain the spread of the virus, economic conditions in Free Zones have deteriorated markedly. The share of Free Zones reporting good economic conditions decreased dras-tically from 56 percent in this year’s first quarter to 15 percent now. About 49 percent evaluate their current situation as normal and 36 percent as poor. As a result, the F-WEB Economic Conditions Index dropped from +48 to -20 and registered a negative value for the first time since the start of the F-WEB in 2018. The outlook is more optimistic, on av-erage, but still less than half of the Free Zones expect an improvement in economic activ-ity in the next three months and one in four Free Zones have a negative outlook. Accord-ingly, the Expected Economic Conditions Index decreased from 63 to 20. Moreover, the survey results suggest that Free Zones are hit particularly hard in comparison with their host economies and that the pandemic affects sectors and firms within Free Zones to a different extent.


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