ABU DHABI, Aug. 09, 2016 (GLOBE NEWSWIRE) -- YPO, the premier chief executive leadership organization in the world, announced that business confidence in the Middle East and North Africa (MENA) remained relatively stable in the second quarter of the year, while improving significantly in the oil-exporting Gulf Cooperation Council (GCC) countries. The YPO Global Pulse Confidence Index for MENA edged up 0.3 point from 55.6 in the first quarter of 2016 to 55.9, halting a steady decline in the last six consecutive quarters.
The rebound in the price of crude oil during the second quarter contributed to bolstering confidence among YPO members in the GCC, with an index increase of 4.9 points, from 52.2 in the first quarter 2016 to 57.1. Among the GCC countries, Saudi Arabia’s jump in confidence was the most significant, rising8.7 points to 62.2.
In the United Arab Emirates, the overall YPO Global Pulse Index increased 5.4 points during this period, reaching 54.8. This follows a slight drop to 49.4 in the first quarter of 2016, its lowest level since the YPO survey began in 2009.
Elsewhere in MENA, Egypt and Lebanon reported modest increases in confidence levels while business leaders from other countries remained less optimistic with a significant decline of 6.9 points in Jordan, reaching an index level of 49.4.
“The rise in GCC business confidence, particularly the continued pickup in Saudi Arabia, with evidence of the same emerging in the U.A.E., seems to be driving the outlook across MENA. The low point for CEO optimism in Saudi Arabia was probably in the fourth quarter of 2015, due to a combination of low oil prices and the unclear outcomes of economic reforms,” says Dr. Florence Eid-Oakden, YPO member and founder and CEO of Arabia Monitor. “The recent pickup in oil prices is now clearly helping to improve the business and economic outlook in these countries, while macro challenges still linger in other countries in the MENA region.”
Despite the significant improvement in confidence within the GCC, business confidence in MENA remains below the worldwide index. For the second quarter of 2016, the YPO Global Pulse Index rose 1.4 points to 59.7, its highest level in a year. 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 results in the United Kingdom. The United States climbed 1.2 points to 60.8, its highest level in a year. Latin America climbed 3.6 points to 54.4, while Asia gained 2.9 points to land at 62.9, making it the most confident region in the world. Africa increased 0.6 point to 53.8, remaining the world’s most pessimistic region. The European Union saw a significant decline in confidence, slipping 3.1 points to 58.5, its lowest score in three years.
Key expectations for the next year: Cautious optimism
When regional business leaders were asked about their expectations of the overall business and economic conditions affecting their companies six months from now, 20% anticipated conditions to worsen, compared to 34% from the previous quarter, indicating a cautious sense of optimism in the short term. Nearly half (47%) reported conditions to remain the same, up from 35% in the first quarter.
When looking ahead 12 months, 59% were optimistic that sales would increase. However, business leaders and chief executives in MENA expressed a more cautious outlook regarding expectations for increasing fixed investment and hiring for the next year. The majority (more than 60 percent) expected fixed investment and headcounts to remain the same in the next year, reflecting growing pressure on cost and rate of hiring.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of July 2016, gathered answers from 2,389 chief executive officers across the globe, including 76 in the Middle East and North Africa. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
About YPO
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.