Vistage Malta and The Malta Chamber recently launched the first CEO Confidence Index in Malta, a benchmarking exercise which provides sentiments from the country’s business leaders on how they feel their business and economy will be fairing in the coming months.
“The Vistage CI index aims to collate and measure the confidence of CEOs around the world,” Vistage Malta CEO Nathan Farrugia explained at the launch. “Now released in Malta, the results show the current sentiment of local business leaders on the past 12 months and their predictions of the upcoming year.”
“This index is a proven trend predictor and in other countries, an early indicator of upcoming economic change,” he continued.
Once collected, an interesting aspect of the exercise is the comparison of results to those from other countries, providing a more complete picture of economic trends within a wider context. These were discussed during a webinar held yesterday, in which Joe Galvin, Chief Research Officer at Vistage International, compared Malta’s findings with those of the UK and US.
“If there was one thing that was badly hit by the COVID-19 it is business confidence,” said Marisa Xuereb, Managing Director of Raesch Quarz (Malta) Ltd and Vice-President of the Malta Chamber, opening the webinar. “The results of the survey run in Malta compared to other countries are very interesting, allowing us to see whether our expectations are well aligned with what is happening internationally.”
Noting that the US and UK CEO Confidence indexes showed similar patterns, Mr Galvin pointed out business confidence in the economy, highlighting that eight per cent of CEOs in the US felt that the economy had recently improved, which proved to be the same percentage in the UK, compared with a less positive one per cent in Malta.
Looking ahead, CEOs in all three jurisdictions were more optimistic, with 59 per cent of US CEOs expecting the economy to improve in the year ahead, similar to 54 per cent among UK CEOs and once again, a more cautious 40 per cent in Malta.
Moving on to business prospects, 67 per cent of US CEOs expect increased revenues in the year ahead, while British CEOs are even more optimistic, with 71 per cent expecting increased revenues. Among the Maltese CEOs interviewed, 49 per cent felt that revenues would increase in the year ahead.
Similar trends were found when it came to expected profits and investments in the year ahead, albeit one measure remained markedly different among CEOs in the US, UK and Malta: human resources. In the US CEO Confidence Index, 64 per cent of respondents said they planned to expand their workforce in the year head – the same percentage found in the UK. In Malta however, this was markedly lower, with only 25 per cent of Maltese CEOs planning to add to their human resources in the coming year.
Speculating into the cause of this, Ms Xuereb explained that loyalty and retention policies dominated the Maltese context, even when it came to the work of The Chamber. “The first priority when the pandemic struck was maintaining employment numbers,” she said, affirming that “we have managed to freeze the employment market – we now have to go beyond that and think of what sort of re-engineering has to happen to move forward.”
Noting that investment will be the key for the economy to emerge from the COVID situation, Mr Galvin also compared replies from respondents in UK and US jurisdictions when it comes to the top areas their businesses will invest during 2021. Technology topped both lists.
Commenting on the value of the Confidence Index, Mr Farrugia noted that “beyond the obvious economic insights and a window into the minds of CEOs around the world, is the confidence it gives leaders to make decisions in a less abstract way.” The findings within the index are aimed at supporting business decision-making to allow for better strategy, planning and investment decisions.
“Many leaders state that ‘it’s lonely at the top’ so having these Vistage insights is very helpful. That, essentially, is the reason why Vistage is the largest cohort of CEOs in the world, and why people join,” the CEO concludes, encouraging local business leaders to take part in the next quarterly survey.
You can find out more about the Confidence Index and becoming a Vistage member here.
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