Confidence levels among European CEOs have seen a record fall over the past three months, with the situation expected to worsen further in the near term as the euro zone debt crisis threatens the stability of the region’s economy, according to a survey by the Young Presidents Organization.
The “Global Pulse Index” published on Wednesday shows confidence dropping to a reading of 51.8, the lowest reading since January 2010 and well below the global average of 58.0.
The United States scored 57.7, and Asia’s reading was 60.9.
Less than one in five CEOs in Europe expect conditions to improve over the next six months, the survey showed.
“Europe today is back to 2009 levels of confidence,” Bhanu Choudhrie, Founding partner and executive director of C&C Alpha Group told CNBC on Wednesday. “The confidence levels going forward seem to predict in the short term a very negative outlook.”
As long as there is uncertainty in the markets, CEOs will feel unsettled, he said. In the longer term, the next 12 months look more positive for Europe, he believes.
“The most important thing is hiring employees,” according to Choudhrie.
Smaller businesses in particular have struggled in the uncertain economic climate. CEOs of businesses with fewer than 100 employees are the least confident about the outlook for their organizations over the next 12 months, the survey showed.
Only 46 percent of small business CEOs expected to grow their sales over the next year , and 14 percent of those CEOs expected sales to drop over the coming 12 months, compared with 6 percent in the previous quarter.
Small companies also trimmed their hiring expectations the most, the survey showed. 12 percent said they would have fewer employees by this time next year, compared with only 4 percent who said the same thing last quarter.
The quarterly survey was conducted in the first two weeks of October 2011 and gathered answers from 2,284 chief executive officers, including 265 from the European Union.