Business confidence among European CEOs bounced to a two-year high in the second quarter, according to a survey out on Tuesday, with executives in the region now more optimistic than those in Latin America.
Optimism among Europe's executives jumped 4.4 points to 55.8, according to the Young Presidents' Organization (YPO), a global networking group for 20,000 CEOs, while confidence in Latin America sunk to an all-time low of 55.5. This means that for the first time since October 2009, European executives are no longer the world's most pessimistic.
In a news release, the YPO said the improved sentiment in Europe reflected the relative calm in the region over the past three months, following the first quarter's Cyprus crisis.
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"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 YPO member.
Business leaders in the U.K. reported a 7 point jump in confidence, possibly reflecting the recent flow of upbeat economic data from the country. Confidence in Germany, France, Spain and Italy also rose, with French executives still the most pessimistic, but less so than in the first quarter.
"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," said Economou.
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Almost half (46 percent) of European directors surveyed in the second quarter forecast the business climate would improve by year-end, with just 14 percent predicting a deterioration. This compared favorably with results from the first quarter, when only 30 percent expected an improvement, while one-quarter foresaw deterioration.
Worldwide, executive confidence remained roughly flat on the first quarter, with rising confidence in developed markets offset by weakening confidence in emerging markets, especially Latin America.
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