GLOBAL- Institutional investors are showing more confidence in the global economy and are more upbeat about the prospects for the US according to the latest edition of the Merrill Lynch fund manager survey.

Of the 300 managers surveyed, 48% said they now expect stronger economic growth compared with 43% last month. While few investors are confident that markets will get a lot stronger, most expect some improvement over the coming year.

Chief global investment strategist David Bowers, who authors the survey, said: “fund managers are wondering if they have been a little too hasty in going negative on recovery. Institutional investors are not rushing to endorse a ‘double dip’ scenario – at least not yet.”

The report suggest managers now view the outlook for US corporate profits as increasingly favourable and second only to emerging markets. Last month also saw an increase in those who consider the US as having the best quality of earnings behind the UK.

Japan, in contrast, has become the region institutional investors see as having the least favourable corporate profits outlook and the worst quality of earnings.

Says Bowers: “fund managers are stepping away from the abyss. Market and economic conditions have not gotten worse since August and they are getting more open minded about the U.S.”