Economic confidence among regional chief executives is at its lowest ebb for more than three years, according to the latest global survey of CEOs across the globe, including 108 from the MENA region.
The YPO Global Pulse Confidence Index by Young Presidents’ Organisation (YPO) for the final quarter of 2015 suggests that low oil prices and political and social unrest in many MENA countries are likely to have worried businesses.
The economic confidence among regional CEOs declined for the fifth consecutive quarter, falling nearly one point to 56.4, below the global confidence level of 58.0.
A decrease in confidence was reported in the UAE where it fell 7.2 points to 50.3, its lowest score in the six-year history of the index. In Saudi Arabia it plummeted 14.7 points to 39.4, while similar declines occurred in Egypt, Kazakhstan, Pakistan and Syria.
Lebanon is the only country with a reported increase in confidence, climbing 4.7 points to 53.6.
“Low oil prices and civil unrest in the region continue to impact confidence levels amongst business leaders,” said Hatem El-Nazer, managing partner at HK Ventures and a member of the YPO Qatar and Cairo chapters.
Confidence amongst GCC countries has fallen 25.0 points since oil prices began to decline in October 2014 from 70.0 to 45.0.
Looking ahead, a third of YPO CEOs – 36 percent - expect business and economic conditions to get worse in the first half of 2016, with 35 percent expecting little or change in the economic environment. Only 29 percent predicted an improvement.
However, MENA CEOs are still bullish about prospects for growth - 60 percent of surveyed CEOs expected to grow revenues in the year ahead, 40 percent expected to increase employee numbers within their organisations, and 48 percent of respondents expected to increase fixed investment.
Globally, the YPO Index reported confidence in the US slipping 0.8 point to land at 59.1, while in Africa it dropped 3.3 points to 51.0.
The European Union remained almost unchanged, gaining 0.3 point to land at 60.5; Asia, which edged up 2.4 points to 59.7, and Latin America, which jumped 4.8 points to 54.4, recorded material increase in economic confidence.
YPO EDGE, the group’s first gathering in the Middle East, will be held in Dubai in March with Kofi Annan, the UN’s former secretary general, delivering a key note speech.
Last week, the group’s MENA chapter - YPO MENA – hosted its first-ever Twitter chat with Muna AbuSulayman, the first Saudi woman to be appointed by the UNDP as a Goodwill Ambassador, and Sofyan Almoayed, managing director of the Bahrain-based Khalid Almoayed & Sons.
When asked about the most pressing opportunities and challenges facing regional business leaders, Almoayed (@almoayed) tweeted: “Top opportunities are in services, I think. Governments in the region are looking for sustainable businesses, which is a huge opportunity for investors.
“Top challenges for foreign companies is acclimatising to culture and knowing how to do business here. Finding local labour is also a major challenge for foreign and local companies alike.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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