Continued slow growth, high unemployment and falling exports lead to pronounced decline in confidence
JOHANNESBURG. - Tuesday, November 3rd 2015 [ME NewsWire]
(BUSINESS WIRE)-- Confidence amongst business leaders in Africa declined in the third quarter of 2015, falling to its lowest recorded level in six years. The YPO Global Pulse Confidence Index for Africa, which tracks CEO confidence levels in the region on a quarterly basis, slipped 3.1 points from 57.4 to 54.3, its lowest level since the inception of the survey.
Having consistently recorded the greatest levels of confidence in the world throughout 2013, confidence amongst African leaders now lags behind every other region in the world, with the exception of Latin America. Confidence in Africa now trails the global composite reading of 58.1 by 3.8 points.
The decline in confidence within Africa was largely due to pessimistic outlooks in Kenya and Nigeria. Kenya plummeted 15.0 points from 64.5 to 49.5, whilst Nigeria slipped 5.6 points from 53.7 to 48.1. However, South Africa, which has the highest weighting in the YPO survey, remained relatively unchanged, losing half a point to land at 58.1.
“African economies are under significant strain at the moment, with continued slow growth and high unemployment now exacerbated by falling exports and production levels,” said Carl Bates, chairman of the Sirdar Global Group and a member of the YPO Johannesburg Golden City Chapter. “With no immediate signs of improvement, CEOs will continue to manage risk tightly, whilst watching key economic indicators for signs of growth and opportunity in 2016.”
Globally, the YPO Global Pulse Confidence Index fell 2.8 points to land at 58.1, its lowest level in four years. This decline in confidence was evident in all of the major economic regions, with the United States falling 2.9 points to 59.9, Asia dropping 4.7 points to 57.3, and the European Union slipping 1.4 points to 60.2.
Key findings in Africa
Economic conditions to remain challenging
When considering the immediate short-term business and economic conditions affecting their organisations, only a quarter (26%) of CEOs across Africa felt that conditions would improve over the next six months, compared with a third (34%) who expected conditions to deteriorate, and 40% who expected to see little change.
CEOs remain confident about their own organisations’ prospects
Despite ongoing concerns about the general economic environment, CEOs in Africa did however remain confident about their own organisations’ prospects for growth and investment in the year ahead.
Whilst the YPO Global Pulse Sales Index for Africa dropped 4.0 points from 68.8 to 64.8, this is still a relatively positive reading. Indeed, two-thirds (66%) of CEOs in Africa expected to increase revenues over the next 12 months, with only 10% predicting a decline.
Similarly, although the YPO Global Pulse Fixed Investment Index slipped fractionally by 0.1 point to 59.4, almost half (45%) of CEOs expected to increase fixed investment in the next year, versus only 12% who expected to cut back in this area.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of October 2015, gathered answers from 1,915 chief executive officers across the globe, including 179 in Africa. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
YPO (Young Presidents’ Organization) is a not-for-profit, global network of young chief executives connected through the shared mission of becoming Better Leaders Through Education and Idea ExchangeTM. Founded in 1950, YPO today provides 23,000 peers and their families in 130 countries with access to unique experiences, extraordinary educational resources, access to alliances with leading institutions, and participation in specialized networks to support their business, community and personal leadership. Altogether, YPO member-run companies employ more than 15 million people around the world and generate US$6 trillion in annual revenues. For more information, visit www.ypo.org.
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YPO (Young Presidents’ Organization)
Linda Fisk, +1-972-629-7305 (United States)