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2017-08-08 06:01 CEST
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YPO Global Pulse Survey: EU business confidence climbs to eight-year high

Chief executives in EU optimistic about economic conditions; non-EU Europe business leaders agree

LONDON - 8 August 2017 - YPO, the premier chief executive leadership organisation in the world, announced today that confidence among chief executives in the European Union (EU) increased in the second quarter of 2017 (2Q 2017).

The YPO Global Pulse Confidence Index for the EU jumped 2.1 points to 63.0, its highest level in the eight-year history of the survey.

There were marked increases in confidence in several major economies around the EU, while the outlook in other markets held steady.

France reported a sharp rise in confidence, rising 10.2 points to 64.7, its highest level since July 2011, likely on the back of President Macron's victory in the general election and improved GDP figures. This increase reversed the 8.1-point decline recorded in the first quarter of the year, when chief executives in France were likely uncertain about the outcome of the presidential election.

Belgium also reported an improved outlook, rising 8.0 points to 69.8, its highest-ever level in the study. Greece climbed 7.0 points to 53.2, back into optimistic territory (above 50 points). This reversed much of the 11.9-point drop in confidence it reported in the first quarter of the year (1Q 2017). Portugal, Denmark and Malta also reported significant up-ticks in outlook.

Other countries remained flattish, with Germany unchanged at 62.7, maintaining its highest level of confidence since January 2011, as sentiment remained positive that business conditions will not be significantly impacted by the upcoming elections.

Spain remained in highly confident territory at 69.4, edging down slightly from 69.6, while Italy also held steady, inching down 0.4 point to 59.4.

The United Kingdom reported a 0.8-point rise to 61.8, its highest level since April 2016, suggesting that chief executives in the country were unperturbed by the political uncertainty caused by the general election in May and the beginning of formal Brexit negotiations.

"After several years of political and economic uncertainty, the EU has been enjoying a period of relative calm over the past six months. The prospect of a wave of populist victories in elections around the region, in France, Germany, Austria and the Netherlands, has disappeared for the time being, and most economies are performing well," said YPO member Thierry Deau, CEO of Meridiam Infrastructure. "Chief executives in Europe will be looking to take advantage of opportunities and accelerate growth plans while the going is good, but they should also be keeping a watchful eye on some key factors, such as Brexit negotiations and U.S. economic performance, which could yet have a disruptive effect on economic conditions."

In non-EU Europe, confidence surged 8.5 points to 60.3, mostly on the back of a complete reversal of Swiss sentiment, where confidence leapt 16.1 points to 61.9.

Key findings in the EU

Business leaders bullish about growth forecasts

Chief executives were optimistic about the prospects for their own organisations over the next 12 months, reporting improved outlooks in each of the three key indicators in the study, namely sales, employment and fixed investment.

More than two-thirds (69%) of chief executives in the EU expected to grow revenues over the next year, compared to only 3% who believed that their turnover would decline. A third (33%) expected to increase headcount, versus only 3% who predicted cuts to staff numbers. And almost half (44%) of business leaders expected to boost fixed investment levels in the next 12 months, while only 6% felt that investment spending would go down.

Outlook for the next six months is more subdued

Despite reporting higher levels of confidence for their own organisations, chief executives sounded a muted note of caution when asked to consider economic conditions over the next six months, with 46% expecting the economic climate to improve, while 41% believe it will remain unchanged, and 13% predict it will deteriorate. This was a slightly more negative outlook than that of 1Q 2017, when 49% expected to see an improvement in the economic landscape in the following six months, 42% predicted it would stay the same and only 9% felt that it would worsen.

Global review

Globally, the YPO Global Pulse Confidence Index slipped 0.5 point to 62.0 in 2Q 2017, while executives in Australasia proved to be the most optimistic, as confidence levels increased 3.6 points to 67.0. In Asia, confidence declined 1.8 points to 61.5, reversing the gains made in 1Q 2017. Confidence in the United States remained firmly in positive territory, with a slight decline of 1.6 points to 63.3, while Canada's confidence rose 0.8 point to 62.9.

Elsewhere, confidence in Latin America climbed 2.1 points to 59.2, its highest level since January 2014. African confidence edged up 1.9 points to 56.3, but despite this being its highest level for two years, it still retains its position as the second-least confident region.

Confidence in the Middle East and North Africa (MENA) region slid 4.5 points to 50.7, its lowest rating ever, making it the least confident region in the world.

YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of July 2017, gathered answers from 1,161 chief executive officers across the globe, including 148 in the EU and 34 in non-EU Europe. Visit for more information about the survey methodology and results around the world.

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