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European CEO confidence on the rise

The results of the latest Young Presidents’ Organisation (YPO) Global Pulse Confidence Index were released earlier this week. The results give a fascinating "pulse check" of business trends.
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 Just to put this into context, the YPO (of which I am a member) is a not-for-profit global network of entrepreneurial chief executives focused on a shared mission of becoming better leaders through education and idea exchange. We have 17,000 CEO members in more than 100 countries.
 
Although the survey covers Europe and unfortunately doesn’t split out the UK separately, the findings still paint an interesting picture of confidence levels and business trends:

  • Third guarter sales are up but employee numbers are unchanged on a year ago.
  • Optimism is rising gradually: 43 per cent of respondents expect general business and economic conditions to be better in the next six months compared with 22 per cent, who expect conditions to be worse. Optimists in the EU outnumber pessimists by 2:1.
  • Higher sales expectations and capital investment plans: In the EU, the sales confidence index rose from 58.8 to 63.6, with 55 per cent of CEOs expecting sales to increase by ten per cent or more. Meanwhile, 38 per cent of CEOs said they are planning capital investment (eg: technology and infrastructure).
  • Still cautious about hiring: Despite sales growth, CEOs are more cautious about hiring with just 24 per cent planning to add employees compared to 28 per cent in July. However, headcount reduction plans are lower, supporting improved confidence.
  • Small companies are more positive than larger ones: 68 per cent of those with less than 100 employees are expecting the most widespread increase in sales, headcount and capital investment.

So the overall message is one of both gradual improvement but also caution about hiring until there is more evidence of sustainable growth. This is why government measures to increase employment flexibility, particularly for SMEs, are so vital to our economic growth prospects.

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