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Business News of Thursday, 4 August 2011

Source: GNA

Survey: Economic sentiment dips among African CEOs

Accra, Aug. 4, GNA - The Young Presidents' Organization (YPO) Global Pulse Index for Africa declined by 2.1 points in the second quarter to 63.3= , according to a statement issued by the organisation on Thursday. "While confidence in the region has fallen in each of the past two quarters, at 63.3 it is still firmly in optimistic territory, above the global index reading of 61.3 and not far from Asia's confidence level of 64.9, the most optimistic reading in the global sample," it said. The survey captured answers from more than 2,000 CEOs representing businesses of all sizes. Altogether, the companies run by YPO members emplo= y more than 15 million people and generate US$5,400 billion in annual revenues. The statement received by GNA said the quarterly survey results were announced on Thursday by YPO, a not-for-profit global network of 18,000 chief executive officers.

It said economic confidence among African CEOs dropped in tandem with the global sample as rising oil prices, sovereign debt concerns in the United States and European Union, and fiscal tightening in China all took their toll on economic sentiment across the globe. The survey found that African CEOs were more cautious about short-term outlook.

It said when asked to evaluate economic conditions currently in comparison to what they were six months ago, survey participants were decidedly less upbeat that they had been in the prior quarter. "Similarly, when asked about how economic conditions six months from now might look compared to today, once again CEOs were markedly less optimistic than they were one quarter ago.

"Thus, in the face of a slower pace of economic activity around the globe, survey participants became more cautious and indicated that the slowdown might last through the end of the year."

The survey found that longer-term outlook was upbeat. "Looking farther ahead, however, when asked about sales, hiring and investment prospects one year from now, CEO answers moved only marginally from what they were in the prior quarter.

"The findings suggest that YPO members in Africa remain optimistic about economic prospects, but expect the acceleration to be more apparent after year-end."

Regarding capital spending plans in particular, the YPO Fixed Investment Confidence Index for Africa actually rose 3.3 points to 67.9, th= e highest index level in the global sample.

"CEOs in Africa plan to continue stepping up capital spending even a= s many other regions of the world show signs of tapering their investment plans," said Khutso I. Mampeule, chairman of South Africa-based Lefa Grou= p Holdings and chair of YPO's Africa region. "While the region has not been without challenges in the first half of the year, YPO members remain optimistic about their business prospects over the next few quarters."

The YPO Global Pulse Confidence Index combines CEO answers about expected and most-recent-quarter sales, employee numbers, fixed investment and business conditions. The index is centred on 50. An index reading below 50 indicates a negative outlook 96 the lower the number, the more negative the outlook. A reading above 50 indicates a positive outlook 96 the higher the number, th= e more positive the outlook.