CEOs in GCC show economic confidence, says YPO survey

Muscat: Economic confidence among CEOs in Oman, Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates reported an increase, even as it continued to decline among other countries in the Middle East and North Africa (MENA) region in the first quarter of this year, a survey says.The survey conducted by YPO (Young Presidents’ Organization), a network of global business leaders and chief executives, announced that economic confidence amongst CEOs climbed 6.3 points from the final quarter in 2015 to 52.2, thanks to improved outlooks in Kuwait, Oman, Qatar and Saudi Arabia.
“This is still a full 18 points below its October 2014 level, before oil prices began to slump, but it does suggest that the worst is now over,” the survey added.
However, the survey reveals that the confidence index for the Middle East and North Africa decreased for the sixth consecutive quarter, falling 0.8 point to 55.6, trailing the global confidence composite score of 58.3.
“Only once before in the seven-year history of the quarterly survey has confidence amongst business leaders in the region dropped to this level, which was during the fourth quarter of 2011 at the height of the global economic crisis,” the survey adds.
Bassel Hamwi, IFC head, Middle East and North Africa and member of YPO Levant Chapter, says that there is little surprise that business leaders in the region continue to show concern about the economic challenges affecting many countries.
“With a combination of slow global economic recovery, cheap oil and regional instability, economic confidence in the MENA region is unlikely to improve in the short-term. CEOs are likely to remain cautious throughout 2016, closely watching global economic indicators for signs of improvement and opportunity,” he added.
Globally, in the first quarter of 2016, the YPO Global Pulse Index composite score remained steady at 58.3, reflecting a relatively optimistic economic outlook.
The survey finds that economic conditions expected to remain tough.
“When considering the short-term outlook, more than a third (34 per cent) of CEOs expected business and economic conditions to deteriorate over the next six months, with 35 per cent anticipating little or no change. Only 31 per cent predicted an improvement in the economic climate,” the survey says.
“Fall in optimism across sales, hiring and fixed investment. Whilst all three component parts of the YPO Global Pulse Index (tracking sales, employment and fixed investment) dropped in the first quarter of 2016, CEOs in the MENA region remained relatively optimistic about the prospects for their own organisations in 2016,” the survey adds.