Confidence amongst business leaders in the Middle East and North Africa (MENA) rose more than 2 points in the second quarter to 62.6, its highest level in more than a year. Confidence increased for the second consecutive quarter, placing MENA as the second most optimistic region in the world, behind Africa. This is according to the latest YPO Global Pulse CEO sentiment survey.
CEO sentiment in several MENA countries suffered on the back of asset sell-offs in emerging markets around the globe in the second quarter of 2013. Nevertheless, rising optimism fueled by strong oil prices and economic expansion in the United Arab Emirates and Saudi Arabia, which weigh the most heavily in this index, more than made up for the downturn in optimism elsewhere.
Sales forecasts tick upwards: CEOs in MENA were bullish on sales growth, with 70% expecting to increase revenues by at least 10% over the next 12 months. The YPO Sales Confidence Index for MENA swelled to a robust 69.5 in the second quarter, the second highest level in the world after Africa.
Capital spending plans remain buoyant: Likewise, the fixed investment component of the index inched up to 62.4, with a majority (55%) of CEOs surveyed saying they plan to step up investments over the next 12 months.
Employment expectations stay flat: Whilst CEOs in the region expected their organisations to increase sales and investments over the next year, the employment outlook is not quite so encouraging. Intentions to increase headcount have stayed within a narrow 1.8-point range for the past year, suggesting that businesses remain cautious about hiring.
“Needless to say, this is a turbulent time for the Middle East, with several countries experiencing socio-political upheaval at worst, and fragile economies at best. At the same time, the region has real pockets of strength and a strong culture of intra-regional trade and investment that serve to buoy overall business confidence,” said Ali Tabbara, managing director of UTC Nexia International and chair of YPO’s Middle East and North Africa region.