YPO Global Pulse Survey: Slight upturn in U.S. CEO confidence after 12-month decline

DALLAS, May 10, 2016 (GLOBE NEWSWIRE) -- YPO, the premier network of global business leaders and chief executives, announced that after four consecutive quarters of declining confidence, economic sentiment for the United States remained steady in the first quarter of the year, climbing 0.5 point to 59.6. Although confidence increased marginally over the first three months of the year among U.S. business leaders, this is the third consecutive quarter where European Union business leaders have recorded higher levels of economic confidence.

The YPO Global Pulse® Confidence Index reported that, amid concerns about the Chinese economy and falling oil prices, confidence levels in the United States slid from a record high of 65.0 in the fourth quarter of 2014 to 59.1 in the fourth quarter of 2015. As global stock markets stabilized and oil prices recovered from their mid-February low, confidence levels have recovered. In addition, the Federal Reserve indicated that any move towards higher interest rates will be far more gradual than previously indicated, causing the dollar to weaken against global currencies. This represents a significant boost to the export economy in the United States.

When asked to evaluate economic conditions today compared to six months ago, there was a significant turnaround from the previous quarter. In this survey, 33% of YPO CEOs believed that economic conditions had improved in the past six months while 25% thought they had worsened. This compares favorably with the fourth quarter of 2015 survey, when only 28% felt that conditions had improved in the previous six months and 32% believed that the economic landscape had deteriorated.

"It's encouraging that the slide in CEO confidence has halted over the past quarter. Despite ongoing volatility in global stock markets and the low price of crude oil, key economic indicators point towards steady growth over the rest of 2016, sparked by improved exports, increased consumer spending and a resurgent housing market," said Steven Condon, president of Truepoint Wealth Counsel and member of the YPO Cincinnati Chapter. "The feeling amongst business leaders in the United States seems to be relatively optimistic, but CEOs expect the unexpected, acknowledge the emotional component of investing and focus on an approach that helps to soften the blows of bad economic news in any one region, sector or asset class."

Globally, in the first quarter of 2016, the YPO Global Pulse Index composite score remained steady at 58.3, reflecting a relatively optimistic economic outlook. Confidence in Africa increased 2.2 points to a relatively positive 53.2, while economic sentiment in Asia remained unchanged, gaining 0.3 point to 60.0. Confidence in the European Union climbed 1.1 points to 61.6. The Middle East and North Africa confidence index slipped 0.8 point to 55.6, whilst in Latin America confidence dropped significantly by 3.6 points to 50.8.

Key Findings in the United States

CEOs more optimistic about short-term economic landscape.
Looking ahead to the next six months, more than a third (37%) of CEOs expected the business and economic conditions affecting their organizations to improve, whilst only 19% predicted a deterioration in conditions. This compares favorably with the fourth quarter of 2015 survey results, when 31% predicted an improvement and 25% expected conditions to worsen.

Business leaders bullish about prospects for their own organizations.
Despite the obvious market challenges, CEOs in the United States remained confident regarding their companies' performance over the next 12 months.

The U.S. Sales Index remained flat, remained flat increasing marginally from 66.2 in fourth quarter 2015 to 66.5 this quarter, still a very healthy outlook. Almost two-thirds (63%) of CEOs forecasted an increase in revenues over the next year, with only 6% projecting a decline in sales.

The U.S. Employment Index slipped marginally, falling 0.7 point to 58.7. However, 39% of CEOs expected to increase headcount in the next 12 months, versus only 6% who expected a reduction in the size of their workforce, suggesting that employment figures will continue to climb in the United States throughout 2016.

Finally, the U.S. Fixed Investment Index declined 1.3 points to 58.7. However, the situation remained positive, with 37% of CEOs forecasting increased investment in the coming year and only 8% expecting to reduce investment.

YPO Global Pulse® Confidence Index

The quarterly electronic survey, conducted in the first two weeks of April 2016, gathered answers from 2,209 chief executive officers across the globe, including 726 in the United States. 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 Exchange." YPO today provides more than 24,000 members in more than 130 countries with access to extraordinary educational resources, alliances with leading institutions, and specialized 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.

YPO (Young Presidents' Organization)
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Source:Young Presidents' Organization, Inc.