DALLAS, Nov. 1, 2016 (GLOBE NEWSWIRE) -- YPO, the premier chief executive leadership organization in the world, announced today that economic confidence in the United States slipped marginally in the third quarter of the year, edging down a modest 0.4 point from 60.8 to 60.4. However, following a rebound in economic confidence in the first half of the year, the outlook amongst business leaders still remains in firmly optimistic territory, according to the quarterly YPO Global Pulse survey.
Business leaders in the United States reported that economic conditions in the country will remain relatively unchanged heading into 2017. Nearly half (47%) of chief executives expected the economic climate to stay at current levels over the next six months. A third (33%) expected business conditions to improve, whilst 21% predicted a deterioration in the economy.
For the first two quarters of 2016, confidence among U.S. chief executives increased, but the upward trend has been halted in the third quarter following slower than anticipated GDP growth, disappointing consumer spending levels and a lack of investment spending. All of this occurred against the backdrop of the forthcoming presidential election, which has dominated the national agenda throughout the year.
"Despite uncertainty due to the U.S. presidential campaign, it's encouraging that business leaders remain optimistic about prospects for growth," said Steve Grubbs, founder of Victory Enterprises and Regional Communications Officer for YPO's Central U.S. Region. "With elections just a few days away, business leaders will be able to start planning for 2017 as they take into account the expected actions of the next administration."
Globally, the YPO Global Pulse Index for the third quarter of 2016 fell by half a point to 59.2. The highest levels of confidence were reported in the European Union, which climbed 2.2 points to 60.7. Asia fell 2.9 points to land at 60.0, as the world's three largest economic regions reported confidence levels within one point of each other. Elsewhere, confidence in Latin America increased by 1.5 points to 55.9, whilst the Middle East and North Africa fell 2.0 points to 53.9, making it the most pessimistic region in the world. Africa reported a more positive outlook, climbing 1.7 points to 55.5, its highest level since July 2015.
Future expectations in the United States
Chief executives still positive about plans for the coming year
Although business leaders reported marginally lower levels of confidence in each of the three main indices of the YPO Global Pulse Index, tracking sales, hiring and fixed investment, they remained optimistic about prospects for their own organizations.
Nearly two-thirds (62%) of U.S. business leaders expected to increase revenues in the next 12 months, with only 7% expecting a reduction in turnover. There were also encouraging signs regarding hiring practices, as 41% expected to increase headcount over the next year, against only 5% who expected to cut staff numbers, suggesting job creation will continue at its current strong rate in the first half of 2017.
Similarly, 41% of U.S. chief executives expected to increase fixed investment in the next 12 months, while only 6% predicted a decline.
Confidence highest amongst small businesses
There was a marked difference in confidence levels in the outlook of business leaders, depending on the size of their organization. Chief executives of small businesses were the most bullish about the year ahead, with 67% expecting to increase revenue, 46% forecasting increased hiring, and 43% predicting greater levels of fixed investment.
In comparison, business leaders of large organizations were less positive, with 55% expecting revenue growth, 41% forecasting increased headcount, and 37% predicting greater fixed investment.
YPO Global Pulse® Confidence Index
The quarterly electronic survey, conducted in the first two weeks of October 2016, gathered answers from 1,625 chief executive officers across the globe, including 641 in the United States. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
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Source:Young Presidents' Organization, Inc.