|Tuesday, 8 August 2017, 12:01 HKT/SGT|
|Business leaders in major Asian economies report a more subdued outlook, but their peers in Australasia are the most confident in the world.|
HONG KONG, Aug 8, 2017 - (ACN Newswire) - YPO, the premier chief executive leadership organisation in the world, reported today that confidence among business leaders in Asia fell marginally in the second quarter of 2017 (2Q 2017).
The YPO Global Pulse Confidence Index for Asia dropped 1.8 points to 61.5, reversing most of the improvements seen in the first quarter of the year, when the Index for the region gained 2.1 points.
Broadly, the outlook in Asia has remained relatively unchanged in the low 60s since January 2016, suggesting that the economic climate across the region is stable, and is set to remain so over the coming year, with moderate GDP and employment growth expected.
Compared to the overall global picture, the outlook in Asia was almost on par, as the Index's global composite score edged down 0.5 point to 62.0.
This decline in confidence was experienced to varying degrees in each of the major economies in the region. Confidence in India remained relatively flat, slipping slightly by 0.6 point to 65.4. At this level though, India remained among the most confident of the world's top ten economies.
Confidence in China, the region's largest economy, fell 2.4 points to 59.2, its lowest level since October 2015. The outlook in Japan also declined, edging down 1.2 points to 54.5, its lowest level in a year.
The region's emerging economies also experienced a drop in confidence, reversing some of the huge improvements in sentiment reported over the previous six months. The YPO Global Pulse Index for the Association of Southeast Asian Nations (ASEAN) countries fell 5.2 points to land at 60.8, with Singapore, Malaysia and Indonesia, notably, reporting a more subdued outlook.
"While there has been a slight downturn in sentiment across the board in Asia, it should be noted that the overall picture looks relatively positive," said YPO member Jairaj Purandare, Chairman of JMP Advisors. "Business leaders in the region, in both established and emerging economies, will still feel optimistic about their prospects for growth over the next year, while remaining watchful of the socio-political landscape and the likely direction of the wider global economy."
Key findings in Asia
Asian chief executives bullish about revenue growth but cautious on hiring and fixed investment
When asked to assess the prospects for their own organisations over the next 12 months based on the Index's three key indicators, namely sales, employment and fixed investment, business leaders in Asia remained in positive territory. The YPO Sales Confidence Index for Asia climbed 0.6 point to 70.9 in 2Q 2017, as almost three-quarters (72%) of chief executives expected to increase revenue over the coming year, while only 1% predicted a decline in turnover.
However, Asian chief executives were less positive when it came to their forecasts for employment and fixed investment. The YPO Employment Confidence Index for the region fell 3.0 points to 55.3, its lowest level in the eight-year history of the YPO Global Pulse survey. Only a quarter (28%) of respondents expected to boost headcount in the next 12 months, while the majority (66%) predicted that staff numbers would remain flat.
The YPO Fixed Investment Confidence Index for Asia sunk 3.9 points to 59.3, its lowest level since October 2015. Looking ahead 12 months, 41% of respondents expected to increase fixed investment spending, while 52% believed that investment levels would remain unchanged.
Economic conditions set to improve in the short-term
The study revealed some encouraging signs about the short-term economic conditions in Asia. The majority (53%) of chief executives believed that the economic climate would improve over the next six months, compared with only 10% who predicted that the business and economic environment would deteriorate.
Key findings in Australasia
Australasia reports record levels of confidence
The YPO Global Pulse Confidence Index for Australasia jumped 3.6 points to 67.0 in 2Q 2017, its highest level in the eight-year history of the study, and making it the most confident region, globally.
Business leaders in Australasia were bullish about the immediate prospects for their own organisations. Three-quarters (75%) of chief executives expected to increase revenue over the next 12 months, and the remaining quarter predicted that turnover would remain at current levels. When it came to hiring, half (51%) of business leaders expected to boost headcount in the next 12 months, with the other half (49%) predicting that staff numbers would remain the same.
When asked to assess the overall business and economic conditions affecting their organisations over the next two quarters, 40% of Australasian chief executives expected conditions to improve, and 45% believed that the economic landscape would remain relatively unchanged. Only 15% felt that conditions would worsen.
Globally, the YPO Global Pulse Confidence Index slipped 0.5 point to 62.0 over 2Q 2017. Confidence in the United States remained firmly in positive territory, with a slight decline of 1.6 points to 63.3, while confidence in Canada rose 0.8 point to 62.9.
In the European Union (EU), confidence climbed 2.1 points to 63.0, its highest level in the eight-year history of the YPO study; while executives in non-EU Europe countries indicated a dramatic improvement, up 8.5 points to 60.3, largely due a complete reversal in Swiss sentiment, which was the main detractor in the region in quarter one.
Elsewhere, confidence in Latin America climbed 2.1 points to 59.2, its highest level since January 2014. In Africa, confidence edged up 1.9 points to 56.3, but despite this being its highest level for two years, it retains its position as the second-least confident region.
The Middle East and North Africa (MENA) region slid 4.5 points to 50.7, its lowest rating ever, making it the least confident region in the world.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of July 2017, gathered answers from 1,161 YPO chief executive officers across the globe, including 139 in Asia and 51 in Australasia. Visit http://www.ypo.org/globalpulse/ for more information about the survey methodology and results from around the world.
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Topic: Press release summary
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