LONDON--(BUSINESS WIRE)--Confidence amongst CEOs within the European Union slumped over the first quarter of 2013, as the fallout from the financial turmoil in Cyprus led to uncertainty about the future of the euro. The YPO Global Pulse Confidence Index for the European Union fell 4 points to 51.4, wiping out the gains made in the final quarter of 2012. The survey results were announced today by YPO (Young Presidents’ Organization), a not-for-profit global network of 20,000 chief executive officers.
For the first time since July 2009, the overall confidence of the eurozone core turned lower than that of the periphery. German confidence lost just over 3 points to land in the mid-50s. Meanwhile, French confidence reverted to pessimistic territory, falling to the low 40s. Collectively, confidence in the core countries landed about a point below that of the periphery countries. In the United Kingdom, the index saw a significant drop-off in optimism in the first quarter, plunging nearly 9 points to the mid-50s.
Key EU findings
A worsening business environment
Chief executives in the EU reported that overall business and economic conditions had deteriorated over the past six months, with four in 10 (40%) indicating conditions had worsened – twice as many as those who reported an improvement (21%).
Subdued sales, hiring and investment forecasts
The YPO Sales Confidence Index for the EU fell from 61.3 to 56.6 in the first quarter, the lowest in the world.
Both the employment and fixed investment components of the index were similarly dismal, weakening to 51.2 and 50.2, respectively – indicating neither optimism nor pessimism. Less than a quarter of business leaders forecasted an increase in headcounts or capital spending over the coming 12 months (23% and 24%, respectively).
Commentary
“The surge in optimism over the fourth quarter of last year proved to be premature in light of developments in early 2013,” said Anastasios Economou, managing director of iGroup and executive member of YPO’s Greater Europe Chapter. “However, while the EU is back to its confidence level of October 2012, the dynamics are different: now, for the first time in four years, the core is actually less optimistic than the periphery.”
Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world. For more information about YPO, visit www.ypo.org.
