The YPO Global Pulse Confidence Index for the Middle East and North Africa region (MENA) advanced marginally by 1.9 points to 60.3 in the first quarter of 2013, the only region in the world to gain ground. The MENA reading is on a par with the global composite index of 60.4.
However, the region remains 3.7 points below where it was this time last year. The survey results were announced by YPO (Young Presidents’ Organization), a not-for-profit global network of 20,000 chief executive officers.
As usual, changes in business confidence at the country level were varied. Increased optimism amongst CEOs in the main oil-exporting nations, including Saudi Arabia, United Arab Emirates and Oman, contributed to the moderate uplift in regional sentiment. Nations where optimism eroded in the first quarter included Egypt and Libya.
Sales forecasts strengthen. The YPO Sales Confidence Index for MENA advanced 2.6 points to 67.8, which is firmly in optimistic territory and above the global sales confidence level of 66.3. Even with the increase, this reading is still 2.3 points below where it was this time last year.
Employment confidence edges higher. The employment component of the index gained 1.8 points to land at 58.8. Service organisations reported the most ambitious recruiting plans, with 51% planning to increase their workforces over the next 12 months compared with 29% in the production (manufacturing and construction) sectors. By company size, small companies indicated the most aggressive hiring plans, with 57% planning to increase headcounts, versus 33% of large companies and 45% of medium-sized companies.
Fixed investment plans remain robust. The fixed investment index increased from 57.3 to 60.8. Four in 10 (44%) MENA CEOs plan to boost capital spending over the next 12 months, compared with 40% of the global sample.
“Business sentiment in MENA remains optimistic, thanks to strong oil prices in the first quarter and ongoing economic diversification in key countries like Saudi Arabia,” said Suzy Kanoo, president of Manama-based Khalil Ebrahim Kanoo, chair of the YPO Middle East and North Africa Region, and a member of YPO’s Bahrain Chapter.