The premier chief executive leadership organization in the world, announced today that economic confidence among business leaders in Africa continued its gradual recovery in the second quarter of 2016. Having dropped to a record low of 51.0 at the end of last year, the YPO Global Pulse Confidence Index for Africa, which tracks economic confidence levels among CEOs in the region on a quarterly basis, remained relatively stable for the second consecutive quarter, climbing 0.6 point from 53.2 to land at 53.8.
Despite the stabilisation in economic confidence, Africa remains the most pessimistic region in the world regarding the current and expected economic landscape, trailing the YPO Global Pulse Confidence Index of 59.7 by 5.9 points.
The stabilisation in economic confidence in Africa was largely due to a more positive outlook among CEOs in South Africa and a significant rebound in confidence in Nigeria. The YPO Global Pulse Index for South Africa rose 2.1 points to 57.5, suggesting that South African business leaders are beginning to see signs of improvement and stability in the economy. However, South African confidence remains considerably weaker than it was pre-2015, when the confidence index remained above the 60-point mark for more than five years.
The YPO Global Pulse Index for Nigeria jumped a remarkable 14.5 points to 54.1 in the second quarter. After plummeting in 2015 to a record low of 30.7, economic confidence in Nigeria has recovered significantly following modest increases in oil prices and a period of relative stability in the country.
Elsewhere, Kenya suffered a sharp drop in confidence, declining 9.9 points to 51.4. While Zimbabwe index gained 1.4 points, confidence remained in pessimistic territory at 40.1.
“Evidently, economic confidence among business leaders in Africa differs sharply by country, but it’s true to say that every CEO in Africa remains concerned to some degree about economic conditions at both the country and regional levels,” said Glenn Gamsy, managing director of GIB Financial Services, principal officer of Destiny Retirement Funds and YPO Johannesburg chapter education officer. “However, there are some signs of encouragement, with oil prices beginning to recover and indications that the global economy may be more stable than was feared six months ago when there were major question marks. CEOs will be hoping for a period of stability and growth in the second half of the year, giving them greater confidence to plan and invest for 2017.”
Worldwide, the YPO Global Pulse Index for the second quarter of 2016 rose 1.4 points to 59.7, its highest level for a year. In line with Africa, most regions around the world enjoyed a modest increase in confidence levels, with the notable exception of the European Union, where confidence eroded following the Brexit referendum result in the United Kingdom. Asia gained 2.9 points to land at 62.9, making it the most confident region in the world. The United States climbed 1.2 points to 60.8, its highest level for a year, and Latin America 3.6 points to 54.4. The Middle East and North Africa remained almost unchanged, edging up 0.3 point to 55.9. Only the European Union saw a significant decline in confidence, slipping 3.1 points to 58.5, its lowest score for three years.
Key findings in Africa
Challenging conditions set to remain for the rest of 2016
When asked about expected economic and business conditions affecting their organisation in the next six months, almost one-third (32%) of CEOs predicted conditions would deteriorate, compared to 27% who expected to see an improvement.
Business leaders remain positive about prospects for their own organisation
Despite concerns over the wider economic climate, many business leaders in Africa believed there are opportunities for growth within their own organisation.
Almost two-thirds (64%) of CEOs predicted an increase in sales in the next 12 months, while 13% expected sales to decline. This is an improvement compared with the first quarter of the year, when 61% forecasted an increase.
Thirty percent of CEOs expected to increase workforce over the next year, compared with 15% who anticipated that their workforce would be reduced. Again, this was a slight improvement with first quarter 2016 when 17% predicted a reduction in their workforce.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of July 2016, gathered answers from 2,389 YPO chief executive officers across the globe, including 162 in Africa. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
YPO is the premier chief executive leadership organization in the world, representing a global community of leaders committed to the shared mission of becoming Better Leaders through Lifelong Learning and Idea ExchangeTM. YPO today provides more than 24,000 members in more than 130 countries with access to extraordinary educational resources, alliances with leading institutions, and specialised networks designed to support their business, community and personal leadership. Altogether, YPO member-run companies employ more than 15 million people around the world and generate USD6 trillion in annual revenues. For more information, visit www.ypo.org.
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