The confidence levels of chief executive officers (CEO) in the world’s major economies remains generally high, but Barbados should not take too much comfort from this trend, warns a local CEO.
“Despite a few blips caused by world events, business leaders in some our major markets are still generally upbeat. But that doesn’t necessarily translate into benefits for us,” says Doug Armstrong, CEO of Automotive Art. “We have home-grown problems in our economy and confidence issues of our own to solve.”
Armstrong, who is president of the Barbados Chapter of the Young Presidents Organisation (YPO), a not-for-profit global network of approximately 20 000 CEOs, made his comments following the recent release of the organization’s third-quarter Global Pulse Confidence Index, a survey of CEO economic sentiment around the world.
According to the survey, the economic confidence of chief executives around the world experienced a tremor during the third quarter of 2014, due to a succession of global events, but the effects aren’t likely to be long lasting.
The global index slipped 0.8 points to 63.2 as stock market turbulence, economic sanctions against Russia, escalating conflict in Iraq and Syria, demonstrations in Hong Kong and the Ebola threat combined to rattle confidence levels around the world. However, the index also reveals that the outlook for the next 12 months hasn’t been affected.
The index is centred on 50, which means a reading above indicates a positive outlook, while a reading below indicates a negative one.
In the United States business leaders shrugged off concerns of a global growth slowdown, and the index slipped 0.6 points to 64.2. Employers there are looking to hire and sales forecasts remain robust.
Canada, where the index dropped 0.7 points to 65.9, remains the most upbeat region, and economic conditions there indicate plenty of room for optimism.
In the European Union, however, although the 12-month outlook remains optimistic, CEO sentiment dipped 2.5 points to 60.0. Confidence in Germany, the EU’s biggest economy, fell 4.5 points to 54.0 as the economy contracted in the second quarter. In the United Kingdom, CEO confidence dipped 2.3 points to 68.4, erasing the gains made in the second quarter.
The indices for Asia and Australasia also recorded drops of 1.8 and 1.5 points respectively, but in the regions of Africa, North Africa & the Middle East (MENA), and Latin America, business leaders were more positive. While the index in Africa remained unchanged at 61.9, in MENA it rose by 1.4 points to 65.8. In Latin America, it rose by one point to 57.3. (PR)