Last October, Australian CEOs hit a three-year high in business confidence, driven perhaps by the change in government. A quarter later, the executives are only a shade off on the YPO Global Pulse Confidence Index, sliding less than one point (0.9) to 61.7 in the latest survey.
The findings, released last week by the Young Presidents’ Organisation – a New York-headquartered group formed in 1950 and including nearly 20,000 key global executives – suggests the Australians CEOs’ expectations have been fulfilled by the new regime, as well as the emerging economy.
“CEOs shrugged off low commodity prices, rising unemployment and the ongoing decline in mining investment to declare their continued confidence in the Australian economy,” said Tudor Marsden-Huggins, managing director of Employment Office Pty Ltd and an executive member of YPO’s Queensland Chapter. “Although the index declined slightly, that is not surprising after such a surge in the prior survey. Hopefully, the gain in confidence in the second half of of 2013 will translate into accelerating growth in 2014.”
Optimism on turnover and hiring
On business conditions over the next six months, the optimism was more pronounced, even when compared with the previous quarter. A majority (55%) said they expected an improved business environment by midyear, an increase from 42% who held such expectations in October. Still, CEOs lowered their 12-month turnover forecasts slightly, with 63 per cent expecting to grow revenues, compared with 70 per cent three months ago. On hiring, 42 per cent expected to increase their headcounts by 10 per cent or more – in line with the prior quarter.
Globally, executives expressed a higher degree of optimistic, following in the footsteps of their Australian peers in the last quarter. Notably, the European Union surged to a new high at 62.2; the United States broke out of its 15-quarter confidence rut, jumping 3 points to 63.5; and Asia’s index rose for the second consecutive quarter, to 63.6. The global index stands at 63.0.
The YPO Global Pulse Confidence Index, a quarterly electronic survey, was conducted in the first two weeks of January. It surveyed 2,088 CEOs across the globe, including140 in Australia.