After jumping more than 6 points in the previous quarter, the YPO Global Pulse Confidence Index for Africa remained largely unchanged during the first quarter of 2013, edging down a third of a point to 67.3. As was the case three months ago, confidence amongst business leaders in Africa is the highest in the world; the global composite index weighed in at 60.4. On a quarterly basis, the African region has consistently topped the global reading in all but one quarter since the inception of the survey in July 2009.
 
Business sentiment in the region was heavily influenced by developments in South Africa, which has the highest weighting in the region’s index. CEO confidence in South Africa inched up a third of a point in the first quarter to 68.3, its highest level since January 2010. Meanwhile, confidence in Nigeria, which has the second-highest weighting, declined more than 4 points to land in the low 60s.

The survey results were announced today by YPO (Young Presidents’ Organization), a not-for-profit global network of 20,000 chief executive officers. The YPO Global Pulse is the only CEO economic sentiment survey to span the globe on a quarterly basis, capturing answers from nearly 1,700 CEOs representing companies of all sizes around the world.

Key findings

Sales outlook stays strong. The YPO Sales Confidence Index for Africa landed at 75.5, just half a point off its record high recorded in January and the highest level of all nine reporting regions. The global sales confidence level landed at 66.3. An overwhelming 85% of African CEOs expected sales to grow by more than 10% over the next 12 months.

Fixed investment and hiring outlooks still buoyant. African CEOs plan to invest and hire at a healthy rate over the next 12 months. The fixed investment and employment components of the Africa index each changed marginally versus the previous quarter. Fixed investment confidence declined 2.4 points to a still lofty 65.5, and hiring expectations ticked up 0.8 point to 62.3, the highest in the world. Small companies indicated the most widespread capital spending increases, with nearly two-thirds (63%) saying they intended to boost investments over the next 12 months.

Services-sector. CEOs indicated the most widespread hiring plans, with 51% saying they planned to grow their headcounts by at least 10% over the same period, compared with 19% in the production (which includes manufacturing, mining and construction) sector.

Commentary

“The emergence of a new consumer class across the African continent is creating many exciting opportunities in the region, despite the unavoidable challenges that come from doing business in frontier markets,” said Khutso Mampeule, chairman of South Africa-based Lefa Group Holdings, the chair of YPO’s Africa Region and a member of the YPO Johannesburg Chapter. “Given the continuing inflows of foreign direct investment and the sub-Saharan GDP growth rates, it’s no surprise that Africa tops the list of the world’s most confident regions.”

Global results

After rallying more than 2 points in January to 61.3, the YPO Global Pulse Confidence Index declined marginally to 60.4 in April, suggesting that CEOs still expect global GDP growth to continue at a moderate pace. Of the nine regions of the world, four landed above the global composite index: Africa (67.3), Asia (64.2), non-EU Europe (60.5) and the United States (60.9). The Middle East and North Africa region index increased for the first time since April 2012, to 60.3. Confidence remained lowest in the European Union, reverting to 51.4 after a 4-point gain last quarter. The U.S. index remained virtually flat with a one-tenth of a point decrease to 60.9.

YPO Global Pulse Confidence Index

The YPO Global Pulse Confidence Index combines CEO answers about expected and most-recent-quarter sales, employee numbers, fixed investment and business conditions. The index is centred on 50. An index reading below 50 indicates a negative outlook – the lower the number, the more negative the outlook. A reading above 50 indicates a positive outlook – the higher the number, the more positive the outlook.

Survey methodology

The quarterly electronic survey, conducted in the first two weeks of April 2013, gathered answers from 1,691 chief executive officers across the globe, including 105 in Africa. Globally, 30% of participants were from large companies (more than 500 employees), 36% from medium-sized companies (100-500 employees), and 34% from small companies (less than 100 employees). By business sector, 23% of participants were from the production sector, 9% from construction and 68% from the services sector.

About YPO

YPO (Young Presidents’ Organization) is a not-for-profit, global network of young chief executives connected around the shared mission of becoming Better Leaders Through Education and Idea ExchangeTM. Founded in 1950, YPO today provides 20,000 peers and their families in more than 120 countries with access to unique experiences, world-class resources, alliances with top learning institutions, and specialised Networks that help them enhance their business, community and personal leadership. Altogether, YPO member-run companies employ more than 15 million people around the world and generate US$6 trillion in annual revenues.

Contact:

YPO (Young Presidents’ Organization)
Michèle Foster
Director of PR and Brand Management
+33.9.7044.0704 (Europe)
[email protected]