Western Australian chief executives have bucked the national trend of declining economic confidence, according to a recent survey of company heads. Results from The Executive Connection’s Confidence Index for the fourth quarter of 2005 were compiled from questions put to 203 Australian chief executives. The questions focused on economic conditions, employment and investment, profit and revenue estimates, and leadership issues. WA chief executives surveyed were found to be more than twice as optimistic as the national average with 45 per cent saying economic conditions had improved during the past year. This is in contrast to the national result, in which only 22 per cent said economic conditions had improved during the past 12 months (compared with 42 per cent this time last year).Recruitment predictions were also higher in WA, with 71 per cent of respondents saying their firm’s total number of employees will increase over the next 12 months, compared with 55 per cent nationally. Managing director of Perth firm Synovate, Julie Beeck, was one of the WA respondents and her thoughts mirrored the positive sentiments of other WA executives surveyed. “WA tends to be more influenced by export trends rather than national trends,” she said. “The local economy benefits from flow-on effects from the positive situation in the resources market.” Overall, the fourth quarter results lead Australian chief executives to end the year on a cautious note. Economic pessimism has increased by 300 per cent, with 28 per cent saying conditions have deteriorated over the past 12 months, compared with just 7 per cent last year. Expectations for the coming year have also declined, with 28 per cent foreseeing worsened conditions in comparison with 17 per cent last year. Profit confidence, a key indicator, is down, with 57 per cent expecting profitability to improve, down on the 62 per cent recorded last year. The news is not altogether bad, however, as optimism remains for fixed investment expenditure and recruitment predictions. Fixed investment expenditure plans are up 4 per cent on last quarter with 52 per cent of chief executives forecasting increases, and recruitment remains a positive with more than half of company bosses planning to increase the number of employees in the next year. In addition, three quarters of chief executives foresee increased sales revenues over the next 12 months, only marginally lower than the same time last year. The Executive Connection’s chief executive, Mike O’Neill, said that although the results showed economic confidence was not positive, chief executives were addressing the major issues in their businesses. “Our surveys over the last year clearly show that recruitment and retention continue to be the big issues in 2006 and beyond,” he said. The fourth quarter survey also focused on leadership issues, and returned some interesting findings. While strategic vision is rated as the most important leadership quality by 45 per cent of chief executives, the majority of them spend less than a quarter of their time on strategy. Team building is seen as the second most important leadership quality. Lack of delegation and procrastination are seen as the worst leadership qualities, with more than half of chief executives saying they need to work less hands-on in the business and more on the business. “This is typical of many business leaders who become engrossed in the day-to-day operational issues of their business,” Mr O’Neill said. Challenge is the greatest motivator for 35 per cent of chief executives, while networking is the task least enjoyed followed by people management. The TEC Confidence Index is held quarterly and the questions for the fourth quarter of 2005 were completed during the week of November 21 2005.
