LONDON, Nov. 07, 2017 (GLOBE NEWSWIRE) -- YPO, the premier chief executive leadership organisation in the world, announced today that the YPO Global Pulse Confidence Index for the EU slipped 1.2 points to 61.8, down from its record level of 63.0 in the previous quarter, and slightly below the global composite score of 62.4.
The slight drop in EU confidence was mainly triggered by a more subdued outlook in three of the region’s major economies, Germany, France and Spain. Germany declined 4.2 points to 58.5, and Spain slipped 4.3 points to 65.1, its lowest level since July 2016, and, following President Macron’s victory in the general election, economic confidence in France fell 4.1 points to 60.6, reversing the 10.2-point rise in confidence it reported in the second quarter.
In other countries, there was little change in outlook. The United Kingdom remained steady with a score of 61.6, despite an apparent lack of progress in the ongoing Brexit negotiations. It was a similar story in Malta, which dropped less than one point to 64.8.
“It’s probably no surprise that there is a slightly more cautious outlook in the EU, given the social and political uncertainty that is being experienced in some countries, such as the Catalan situation in Spain and the election results in Germany. However, despite this, chief executives in Europe remain positive about the strength of the economy and prospects for growth,” said YPO member and President of Zenato, Nadia Zenato. “Business leaders will be looking for opportunities to expand as we move into 2018, while closely monitoring local and global economic performance indicators.”
Non-EU Europe also saw a slight dip in confidence, dropping 1.7 points to 58.6. This was mainly due to a more subdued outlook in Switzerland, which fell 4.4 points to 57.5. This is against a background of the effects of a strong Swiss Franc on the Swiss export economy, as well as lackluster private and government consumption. On the other side of the scale, confidence in Turkey spiked 7 points. This coincides with stronger-than-expected economic growth in the country, and the International Monetary Fund (IMF) sharply increasing its GDP forecast for Turkey to 5.3% from 2.5% for 2017.
Overall, despite some localised headwinds and uncertainty around Brexit, both the EU and non-EU Europe remain firmly in positive territory.
Key findings
Chief executives more cautious about short-term economic climate
Almost half (49%) of chief executives in the EU predicted that business and economic conditions would remain the same during the next six months, while 42% expected improved conditions, down from 46% in 2Q 2017, and 9% expected the economic environment to deteriorate.
Business leaders still confident about growth
When considering the prospects for their own organisations over the next 12 months, chief executives in the EU were firmly optimistic about the three key indicators of the YPO Global Pulse Survey, namely sales, employment and fixed investment.
Almost two-thirds (62%) of respondents expected to grow revenues, compared to only 2% who stated that their turnover would decline.
In terms of hiring, a third (33%) expected to increase headcount, while only 3% forecasted cuts to staff numbers.
Fixed investment outlook also remained buoyant, with almost half (48%) of respondents expecting to boost fixed investment levels, versus only 5% who predicted a reduction in investment spending.
Global review
Globally, confidence remained steady at 62.4, now firmly in positive territory for four consecutive surveys, hovering between 62.0 and 62.5. The United States was the most confident region at 63.5, Canadian confidence also remained positive, declining marginally by 1.1 points to 61.8, and Australasia saw a 3.7-point decline to 63.3. In Asia, confidence rose 1.3 points to 62.8, driven by an 8.8-point leap in China, and improved confidence in the Association of Southeast Asian Nations (ASEAN).
Elsewhere, confidence in Latin America jumped 2.8 points to 62.0, largely driven by Brazil’s 8-point hike in confidence. In Africa, the confidence edged up 1.2 points to 57.5, yet it remains the second least-confident region, trailed only by the Middle East and North Africa (MENA) region, where confidence increased 2.5 points to 53.2.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of October 2017, gathered answers from 925 chief executive officers across the globe, including 124 in the EU and 31 in non-EU Europe. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
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