DALLAS, Aug. 9, 2016 (GLOBE NEWSWIRE) -- YPO, the premier chief executive leadership organization in the world, announced today that economic confidence in the United States increased in the second quarter of the year, climbing 1.2 points to 60.8, its highest level for a year. After economic sentiment declined consistently throughout 2015, this was the second consecutive quarter where U.S. business leaders reported an upturn in confidence.
The improved outlook follows a modest rebound in oil prices, a fall in the value of the dollar and increased economic output in the second quarter of the year. Business leaders in the United States are now among the most confident in the world, trailing only their counterparts in Asia, which reported the most optimistic economic outlook in the world, according to the quarterly YPO Global Pulse survey.
However, despite this more positive outlook, some concerns remained about wider business and economic conditions. When asked to evaluate economic conditions today compared to six months ago, 30% of participants reported an improvement while 26% believed the economic landscape had worsened. This was a more pessimistic outlook than in the previous quarter, when 33% reported an improvement and 25% reported a weakening in the economic environment over the previous six months.
"Despite all of the current economic and social unrest around the world, market volatility caused by the Brexit decision, and ongoing concerns about Chinese economic performance, there are encouraging signs that the U.S. recovery is gathering momentum," said Farid Naib, CEO of Professional Trading Solutions Inc. and regional chair of YPO Northeastern U.S. Region. "Most CEOs in the United States will face the second half of the year with cautious optimism, looking to exploit opportunities as they arise, while keeping a close eye on key economic indicators within the country and around the world."
Worldwide, the YPO Global Pulse Index for the second quarter of 2016 rose 1.4 points to 59.7, its highest level for a year. In line with the United States, most regions around the world enjoyed a modest increase in confidence levels, with the notable exception of the European Union, where confidence fell away following the Brexit referendum result in the United Kingdom. Asia gained 2.9 points to land at 62.9, making it the most confident region in the world. Latin America climbed 3.6 points to 54.4, while the Middle East and North Africa remained almost unchanged, edging up 0.3 point to 55.9. Africa increased 0.6 point to 53.8, remaining the world's most pessimistic region. The European Union saw a significant decline in confidence, slipping 3.1 points to 58.5, its lowest score in three years.
Future expectations in the United States
CEOs still wary about short-term economic backdrop.
Looking ahead to the rest of 2016, more than a fifth (22%) of business leaders expected the business and economic conditions affecting their organizations to worsen over the next six months while 31% believed that the economic landscape would improve. This is a gloomier picture than in the previous quarter's survey, when only 19% expected to see a deterioration in conditions and 37% believed the economic environment would improve.
Business leaders still bullish about prospects for their own organizations.
Despite concerns about the wider economy, chief executives and business leaders in the United States reported high levels of confidence in each of the three main indices of the YPO Global Pulse Index, tracking sales, hiring and fixed investment.
Two-thirds of participants forecasted an increase in revenues over the next year, with only 5% projecting a decline in sales. In terms of employment, 43% of business leaders expected to increase headcount in the next 12 months, versus only 5% who expected a reduction in the size of their workforce, suggesting that employment figures will continue to improve in the United States for the rest of this year and into 2017. Similarly, 43% of CEOs expected to increase fixed investment levels over the next 12 months, versus only 7% who expected a reduction in fixed investment.
YPO Global Pulse® Confidence Index
The quarterly electronic survey, conducted in the first two weeks of July 2016, gathered answers from 2,389 chief executive officers across the globe, including 1,177 in the United States. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
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 ExchangeTM. 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.
Office: +1 972 629 7305 (United States)
Mobile: +1 972 207 4298
Source:Young Presidents' Organization, Inc.