SAO PAULO, Aug. 4, 2015 (GLOBE NEWSWIRE) -- Confidence amongst CEOs in Brazil disintegrated further over the second quarter of 2015 on the back of continued low oil prices and the fallout from the Petrobas scandal. The YPO Global Pulse Confidence Index for Brazil, which tracks CEO confidence levels in the region on a quarterly basis, slipped 3.1 points to 43.1, the lowest level recorded since the study's inception in 2009.
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The pessimistic mood in Brazil, the largest economy in the region, was largely responsible for Latin America landing as the least confident region in the world for the third consecutive quarter. The YPO Global Pulse Confidence Index for Latin America fell 2.3 points to 50.1.
Globally, the YPO Global Pulse Confidence Index slipped 0.6 point to land at 60.9, its lowest level since October 2013. This decline in confidence was evident in all of the major economic regions, with the United States falling 0.5 point to 62.8, Asia dropping 1.6 points to 62.0, and the European Union slipping 0.9 point to 61.6.
"As with most commodity exporting countries around the world, the Brazilian economy has been hit hard by the dramatic drop in commodity prices, as well as a significant domestic economic recession over the past year. Add in the destabilising effect that alleged corruption scandals have had on Brazilian political and economic institutions, and it is little wonder that business leaders in Brazil are feeling the strain," said Tom Osborne, president of Osborne Costa Construtora Ltda. and chair of YPO Brazil area. "It's important that Brazilian CEOs remain cautious yet open to the opportunities that are likely to emerge over the coming months and year."
A bleak outlook for employment and fixed investment
Confidence in Brazil fell in each of the three key indices of the survey, tracking sales, employment and fixed investment. Only 40% of CEOs said they expected to grow sales over the next 12 months, whilst a quarter (25%) predicted that revenues will drop. Even more strikingly, only 14% of CEOs expected to increase headcount within their organisations in the next year, versus 25% who predicted that they would reduce the size of their workforce. When it came to fixed investment, it was a similar story, with 19% predicting that levels of fixed investments would increase but almost a third (31%) of CEOs expecting an overall reduction.
Situation likely to get worse before it improves
The majority of CEOs saw no signs of a significant upturn in the Brazilian economy in the immediate short term. Fewer than one in five CEOs predicted that the business and economic conditions affecting their organisations would improve over the next six months, whilst half of respondents expected conditions to deteriorate over this period.
YPO Global Pulse Confidence Index
The quarterly electronic survey, conducted in the first two weeks of July 2015, gathered answers from 2,127 chief executive officers across the globe, including 85 in Brazil. Visit www.ypo.org/globalpulse for more information about the survey methodology and results from around the world.
About YPO
YPO (Young Presidents' Organization) is a not-for-profit, global network of young chief executives connected through the shared mission of becoming Better Leaders Through Education and Idea ExchangeTM. Founded in 1950, YPO today provides 23,000 peers and their families in 130 countries with access to unique experiences, extraordinary educational resources, access to alliances with leading institutions, and participation in specialised networks to support their business, community and personal leadership. Altogether, YPO member-run companies employ more than 15 million people around the world and generate US$6 trillion in annual revenues. For more information, visit www.ypo.org.
This is an unofficial translation of the original release. The release in its original language is the only official, authoritative version.
