The EU is the only major economic region to report higher levels of business confidence in the Young Presidents Organisation (YPO) Q3 survey, as Asia edged down slightly, with Asean experiencing marked decline, while the US remained largely stable.

YPO, the premier chief executive leadership organisation in the world, reported that economic confidence amongst business leaders in Asia fell during the third quarter of the year. The YPO Global Pulse Confidence Index for Asia slipped 2.9 points, from 62.9 to 60.0 over the last three months.

Having reported the highest levels of confidence of any region in the world in the second quarter of the year, Asia fell behind the US and the EU in the third quarter but remained marginally ahead of the global average, which landed at 59.2.

The decline in sentiment was mainly felt within Asia’s emerging economies. Confidence amongst YPO chief executives within Asean countries slumped to its lowest level in seven years, with Indonesia, Malaysia, Singapore and Vietnam all experiencing marked decline in optimism.

Elsewhere, confidence remained steady.

China reported a slight decline, slipping just 0.8 point to 61.4, its lowest level for a year but still in firmly optimistic territory. India dropped 2.0 points to 66.0 but maintained its position as the most confident country in the region and within the world’s top 10 economies.

Japan improved 1.1 point to 55.1, but is still below the regional score of 60.0.

“There are significant differences in economic outlook across Asia. Within the emerging economies, there are concerns about the increased valuation of the U.S. dollar and ongoing worries about the short-term economic performance of China and India,” says Azran Osman-Rani, CEO of iflix Malaysia and chair of the YPO Malaysia Chapter.

“On the other hand, the outlook amongst business leaders within these leading economies remains strong,” he adds.

Globally, the YPO Global Pulse Index for this period fell by half a point to 59.2. The highest levels of confidence were reported in the EU, which climbed 2.2 points to 60.7. The US, where confidence remained stable, edged down 0.4 point from 60.8 to 60.4.

This meant that the world’s three largest economic regions reported confidence levels within one point of each other. Elsewhere, confidence in Latin America increased by 1.5 points to 55.9, whilst the Middle East and North Africa fell 2.0 points to 53.9, making it the most pessimistic region in the world.

Confidence in Africa rose 1.7 points to land at 55.5, its highest level since July 2015.

The key findings in Asia were lower forecasts for sales, hiring and investment.

Concerns over economic conditions had an impact on chief executives’ predictions for their own organisations over the next 12 months.

The three key indices in the survey, sales, employment and fixed investment, all fell in the third quarter.

Most notably, the YPO Employment Index for Asia fell 2.7 points to 55.5, its lowest level for four years.

Less than a third (30%) of chief executives expected to increase headcount.

This was significantly down on the previous quarter, when 38% forecast increased employment. In fact, 10% predicted a reduction in staff numbers, compared with 7% in the previous study.

As for sales, 66% of business leaders expected to increase revenue, down from 72% in the second quarter.

The YPO Global Pulse Index for Asean tumbled by a significant 7.9 points to 52.6 — its lowest level in the study’s seven-year history and more than seven points behind Asia as a whole.

There was increase in confidence in Australasia. The YPO Global Pulse Index for he region jumped 2.3 points, from 58.3 to 60.6, in the third quarter, its highest level since July 2015.

Business leaders there reported more subdued projections for sales than in the previous quarter, but they predicted increased levels of fixed investment and employment.

Heading into 2017, the outlook globally is likely to stay the same as nearly half (49%) of chief executives forecast there would be little or no change in the business and economic conditions affecting their organisations over the next six months.

More than a quarter (28%) expected conditions to improve, and 24% expected the economic landscape to deteriorate.