Disparate movements despite dip in index
The latest YPO Global Pulse Confidence Index for Asia remains essentially unchanged after two consecutive quarters of gains, with deterioration in some countries largely offset by improvements in others, resulting in a mere 0.2-point decline in confidence to 63.4 for the region.
The reading is firmly in optimistic territory and slightly higher than the global composite.
The YPO (Young Presidents’ Organisation) is a not-for-profit, global network of young chief executives connected around the shared mission of becoming “Better Leaders through Education and Idea Exchange”.
While the regional index overall lost only 0.2 point, there were disparate movements among countries in the region.
For example, CEOs in India showed increased confidence for the third straight quarter.
However, revisions in gross-domestic-product growth expectations for both China and Japan led to diminished confidence there.
Confidence in Southeast Asia was generally down within a context of capital outflows from emerging markets in general.
“The initial results of last year’s monetary-policy changes in Japan and government reforms in China provided renewed confidence among Asian CEOs earlier in the year,” said Terry O'Connor, regional chief executive officer of Courts Asia and an executive member of the YPO Singapore Chapter.
“While enthusiasm in these two important markets was tempered in the first quarter, CEOs there and in the region overall remain confident, indicating that they continue to detect plenty of opportunities in Asia,” he added.
Globally, low interest rates and continued recovery in developed markets in the first quarter of 2014 sustained CEO optimism.
The YPO Global Pulse Confidence Index inched down half a point to 62.5. Confidence downturns in pockets of the emerging world contributed to the slight decline.
Sales outlook and hiring expectations register the highest confidence in 12 months: The YPO Sales Confidence Index for Asia continued its upward momentum, gaining 1 point to 71.4, its highest mark since April 2013.
The YPO Employment Confidence Index for Asia also edged up, gaining 0.1 point to 58.3 after a 2-point increase in the previous quarter; it remains less than a point short of the global index for employment.
Despite the continued positive outlooks for sales and hiring, the YPO Fixed Investment Confidence Index in Asia fell 3 points as CEOs pulled back on their plans for capital spending.
CEOs expect improved business conditions ahead: When asked to evaluate the overall economic climate compared with six months ago, 47 per cent of CEOs said conditions had improved, up from 42 per cent in January.
Survey participants were more optimistic about the coming six months, as 62 per cent expected conditions to improve.
Service-sector CEOs were more confident than their manufacturing and construction counterparts as nearly two-thirds (64 per cent) of service-company CEOs foresaw better conditions, compared with a combined 59 per cent for the other sectors.