JOHANNESBURG, May 1, 2014 (GLOBE NEWSWIRE) -- Confidence levels amongst business leaders in Africa fell for the second consecutive quarter during the first three months of 2014. The YPO Global Pulse Confidence Index for Africa, which tracks CEO confidence levels in the region on a quarterly basis, dropped 2.2 points to 61.8. This is the first time in four years that confidence in Africa has fallen below the global composite reading, which landed at 62.5.
However, at 61.8 Africa remains in firmly optimistic territory and is just 1.9 points below the United States, which according to the survey is now the world's most optimistic region.
The decline in optimism over the first quarter was largely attributable to a 4.7-point fall in South Africa, which has the highest weighting in the index. South Africa came in at 62.9, its lowest level in 18 months. Conversely, Nigeria, which has the second-highest weighting in the regional index, saw a rise of 4.9 points to 62.6.
"From a regional perspective, CEO sentiment softened in Africa over the first quarter, but when you look at confidence at the country level, there is clear optimism about business and investment across the continent," said Paul Berman, chief executive officer of Cape Town-based Berman Brothers Property Holdings (Pty) Ltd. and chair of YPO's Africa region.
Globally, low interest rates and continued recovery in developed markets in the first quarter of 2014 sustained CEO optimism. The YPO Global Pulse Confidence Index inched down half a point to 62.5. Confidence downturns in pockets of the emerging world contributed to the slight decline.
Key findings for Africa
Sales forecasts remain buoyant: For the first time in 18 months, the YPO Global Pulse Sales Confidence Index for Africa was not the highest in the world, having slipped marginally behind Asia in the April survey. Even so, sales forecasts remained extremely optimistic. Almost three quarters (72%) of CEOs surveyed in Africa expected turnover to increase by 10% or more over the next 12 months.
Fixed investment plans stay on course: Investment confidence in Africa is the world's highest, even though this component of the index dipped 2.6 points to 63.0 in the first quarter. Almost half (46%) of survey participants expected to step up capital spending in the coming quarters.
Employment projections little changed: CEOs expressed similar plans for hiring in April as they did in January, with 37% expecting to add new workers over the next 12 months. The majority (56%) planned to keep head counts about the same.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of April, gathered answers from 1,996 chief executive officers across the globe, including 195 in Africa. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
About YPO
YPO (Young Presidents' Organization) is a not-for-profit, global network of young chief executives connected around the shared mission of becoming Better Leaders Through Education and Idea ExchangeTM. Founded in 1950, YPO today provides 20,000 peers and their families in more than 120 countries with access to unique experiences, world-class resources, alliances with top learning institutions, and specialised networks that help them enhance 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. Also see us on Facebook and follow us on Twitter.