U.S. chief executive confidence levels on hold in second quarter

DALLAS, August 8, 2017 - YPO, the premier chief executive leadership organization in the world, announced today that economic confidence in the United States fell slightly in the second quarter of the year (2Q 2017) but stayed in firmly optimistic territory.

The YPO Global Pulse Confidence Index for the United States slipped 1.6 points to 63.3 in the second quarter but remained ahead of the global composite score of 62.0 and is the second most confident region in the world, after Australasia.

This slight dip in outlook follows a 4.5-point increase in confidence over the previous two quarters, on the back of promised pro-business policies and regulatory amendments. The latest results suggest that chief executives in the United States are concerned that these may have stalled.

Overall though, U.S. business leaders remained firmly optimistic about business and economic conditions. Almost half (46%) expected the economic climate to improve over the second half of the year, compared to only 11% who predicted that the economic environment would deteriorate.

"Most of the economic indicators suggest that the U.S. economy is set to perform well in the second half of the year, and there is a real sense of confidence and opportunity amongst chief executives," said YPO member Joseph DeWoody, President of Clear Fork Royalty. 

"Of course, business leaders will need to remain watchful of trends within the domestic and global economy, but for the most part, they will be keen to take advantage of the current economic climate and accelerate their growth plans."

Future expectations in the United States

Chief executives forecast growth over the next 12 months

While the three key indicators of the YPO Global Pulse Confidence Index, measuring sales, hiring and fixed investment, edged down slightly in 2Q 2017, chief executives in the United States still reported high levels of confidence when it came to the immediate prospects for their own organizations.

The YPO Sales Confidence Index for the United States fell 1.1 points to 69.9. However, almost three-quarters (71%) of business leaders predicted increased revenues over the next year, compared with only 4% who expected a reduction in turnover.

It was a similar story when it came to hiring, as the YPO Employment Confidence Index for the region dropped 0.7 point to land at 61.5. Half (51%) of chief executives expected headcount to remain flat over the next 12 months, 46% expected to increase the size of their workforce, and only 3% predicted cuts to staff numbers.

Finally, the YPO Fixed Investment Confidence Index lost 1.0 point, coming in at 61.5. Half (51%) predicted that fixed investment levels would remain the same over the next year, 43% expected to boost spending, and 6% forecasted a reduction in investment levels.

Global Review

Globally, the YPO Global Pulse Confidence Index slipped 0.5 point to 62.0 over the second quarter, while executives in Australasia proved to be the most optimistic as confidence increased 3.6 points to 67.0. Closer to home, confidence in Canada rose 0.8 point to 62.9.

In the European Union (EU), confidence climbed 2.1 points to 63.0, its highest level in the eight-year history of the YPO study; while executives in non-EU Europe countries indicated a dramatic improvement, up 8.5 points to 60.3, largely due a complete reversal in Swiss sentiment, which was the main detractor in the region last quarter.

In Asia, confidence declined 1.8 points to 61.5, reversing the gains made in the first quarter of the year.

Elsewhere, confidence in Latin America climbed 2.1 points to 59.2, its highest level since January 2014. Africa confidence edged up 1.9 points to 56.3, its highest level for two years, yet the continent still retains its position as the second-least confident region.

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, gathered answers from 1,161 chief executive officers across the globe, including 477 in the United States. Visit www.ypo.org/globalpulsef or more information about the survey methodology and results from around the world.

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