YPO chief executives in South Africa report a more positive outlook
JOHANNESBURG, South Africa, Nov. 06, 2017 (GLOBE NEWSWIRE) — YPO, the premier leadership organisation for chief executives in the world, reported today that the YPO Global Pulse Confidence Index for Africa edged up 1.2 points to 57.5 in the third quarter of 2017 (3Q 2017).
Economic sentiment among business leaders in Africa is at its highest level since April 2015, however, it remains the second least-confident region in the world. This slight improvement in sentiment was largely driven by a surge in confidence in South Africa, which has the highest weighting in the region, from 54.7 to 60.4.
Other nations also reported more positive outlooks. Nigeria climbed 3.6 points to 60.5, continuing a remarkable two-year rebound, from a low of 30.7 in 2015, when global oil prices hit rock bottom, and Zimbabwe edged up 1.9 points to 58.1, its highest level since July 2013. However, confidence across East Africa waned, sliding into negative territory.
“There are signs that economic conditions are improving in several of the region’s major economies, with the International Monetary Fund showing cautious optimism about growth in Sub-Saharan Africa over the next two years,” said YPO member Mary Bomela, CEO of the Mineworkers Investment Company.
“However, there is still a significant amount of concern around factors such as political volatility, and delays in infrastructure spend and policy reform, as well as uncertainty about the direction of the global economy. Chief executives will continue to be cautious in their decision-making and will try to avoid taking on unnecessary risk as we move towards 2018.”
Key findings in Africa
Almost half (49%) of business leaders in Africa reported that business and economic conditions had deteriorated in the previous six months, while only a quarter (28%) felt that the economic climate had improved.
Looking forward to the next six months, it was a slightly more optimistic picture as 38% of respondents predicted the economic climate would improve, compared with only 27% who expected it to get worse and 35% who felt there would be little or no change.
Sales forecasts fade, hiring outlook improves
Looking out 12 months, it was a mixed picture in Africa when it came to movements in the three key indicators of the YPO Global Pulse Index, which track sales, employment and fixed investment.
The YPO Sales Confidence Index for Africa dropped 2.1 points to 65.5. However, most respondents expressed confidence about their organisations’ sales prospects. Almost two-thirds (64%) of leaders predicted revenue growth, while only 8% expected turnover to shrink.
Employment confidence jumped 4.0 points to 56.2, with one-third (31%) of respondents expecting to increase headcount, versus 6% who expected to cut staff numbers. The majority (63%) expected the size of their workforce to stay flat. This is a more positive outlook than the previous quarter, when only 22% predicted increased headcount and 8% expected to reduce staff numbers.
The outlook for fixed investment in Africa was almost unchanged, inching up 0.2 point to 59.4. Almost half (45%) of business leaders expected to increase spend in the next year, while 48% believed that investment levels will stay flat, and 7% expected to cut investment levels.
Globally, confidence remained steady at 62.4, now firmly in positive territory for four consecutive surveys, hovering between of 62.0 and 62.5. The United States is 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 Europe, the mood remained upbeat, as the European Union (EU) slipped slightly by 1.2 points to 61.8, and non-EU Europe edged down 1.7 points to 58.6. 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 the Middle East and North Africa (MENA) region, confidence increased 2.5 points to 53.2, yet it remains the least-confident region in the world.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of October 2017, gathered answers from 925 YPO chief executive officers across the globe, including 76 in Africa. Visit www.ypo.org/globalpulse for more information about the survey methodology and to view the results from around the world.
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