Global business optimism declined for the second consecutive quarter, as companies grapple with rising trade protectionism, elevated interest rates and growing financial risks, according to a new report from Dun & Bradstreet.

The 2025 Q2 Global Business Optimism Insights report, based on a survey of 10,000 business leaders across 32 economies, shows a 1.3% drop in overall business optimism. That follows a sharper 12.9% decline the previous quarter.

“The reshaping of trade relationships and tariff uncertainty contributed to over 90% of the economies surveyed reporting a decline in their financial confidence index,” said Neeraj Sahai, president of Dun & Bradstreet International.

Financial confidence dropped 8.6%, while optimism around supply chain continuity remained flat. Investment optimism also declined, reflecting uncertainty over the timing and pace of potential interest rate cuts this year.

Export-reliant sectors such as automotives, electricals and metals were hit especially hard, particularly in the U.S., Mexico, South Korea and Japan. These countries reported increased cost pressures and demand volatility due to shifting trade policies and tariffs.

Dun & Bradstreet’s data shows 86% of businesses expect a resurgence in inflation to disrupt operations. Meanwhile, 70% see tighter domestic monetary policy as likely, with 83% expecting it to have a material impact.

Advanced economies drove the overall decline in optimism, dropping 1.7%. Emerging markets held steady. Confidence in lead times dropped globally by 7.8%, with advanced economies seeing a larger 9.5% decrease.

The Global Business Investment Confidence Index fell 0.6%. Optimism for capital expenditures dropped from 77% last quarter to 69%, with the steepest declines seen in metals and mining—industries most exposed to new U.S. tariffs.

The ESG Index declined 3.3% after three quarters of growth, indicating waning business engagement in social and governance initiatives.

“The prospect of a resurgence of inflation given higher import tariffs has tempered expectations for the scale of interest rate cuts, which will likely restrict business investment,” said Arun Singh, Dun & Bradstreet’s global chief economist.

More information about the indices can be found on page 28 of the full report.