Business confidence amongst European Union CEOs jumped 4.4 points to 55.8, its highest level for two years, according to the latest YPO Global Pulse CEO sentiment survey. For the first time since October 2009, business confidence in the EU was not the lowest in the world; it squeaked ahead of Latin America by a third of a point.
CEO confidence in the United Kingdom rose more than 7 points to the optimistic low 60s. German confidence climbed more moderately to land in the cautiously optimistic high 50s. Confidence in France, Spain and Italy also rose by around 4 points each, although unlike the relatively optimistic Spaniards, whose business confidence registered in the high 50s, France wallowed in pessimistic territory and Italian CEOs landed in the middle of the scale at 50.
Key findings
Challenging conditions but improvements expected
Symptomatic of a touchy market, the same proportion (28%) of chief executives believed that the business and economic environment has deteriorated over the last six months as those who believed that conditions have improved.
Almost half (46%) of CEOs expected the business climate to improve by year end versus only 14% who expected conditions to get worse. In the previous quarter’s results, only 30% expected improvements in business conditions in the six months and as many as 25% forecasted a worsening economic environment.
Upturns in sales, hiring and investment, but EU still lags behind
Looking ahead 12 months, EU business leaders indicated marked improvements in sales, hiring and investment forecasts compared with three months earlier. At the same time, confidence levels in the EU for all three factors were still the lowest in the world and several points below the global reading.
Commentary
“For the past nine months, the presence or absence of a financial shock in a given quarter has heavily influenced the business confidence of CEOs in the European Union,” said Anastasios Economou, managing director of iGroup and executive member of YPO’s Greater Europe Chapter. “What we need to see now as vitally as ever is sustainable improvement in business conditions based on clear, coordinated and consistent central policy; otherwise, CEO confidence will remain fragile.”
Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world. For more information about YPO, visit www.ypo.org.
