Confidence levels amongst business leaders in Africa fell for the second consecutive quarter during the first three months of 2014.

South Africa came in at 62.9, its lowest level in 18 months. Conversely, Nigeria, which has the second-highest weighting in the regional index, saw a rise of 4.9 points to 62.6.

The YPO Global Pulse Confidence Index for Africa, which tracks CEO confidence levels in the region on a quarterly basis, dropped 2.2 points to 61.8. This is the first time in four years that confidence in Africa has fallen below the global composite reading, which landed at 62.5.

However, at 61.8 Africa remains in firmly optimistic territory and is just 1.9 points below the United States, which according to the survey is now the world’s most optimistic region.

The decline in optimism over the first quarter was largely attributable to a 4.7-point fall in South Africa, which has the highest weighting in the index.

“From a regional perspective, CEO sentiment softened in Africa over the first quarter, but when you look at confidence at the country level, there is clear optimism about business and investment across the continent,” said Paul Berman, CEO of Cape Town-based Berman Brothers Property and chair of YPO’s Africa region.

Globally, low interest rates and continued recovery in developed markets in the first quarter of 2014 sustained CEO optimism. The YPO Global Pulse Confidence Index inched down half a point to 62.5. Confidence downturns in pockets of the emerging world contributed to the slight decline.

Key findings for Africa

Sales forecasts remain buoyant: For the first time in 18 months, the YPO Global Pulse Sales Confidence Index for Africa was not the highest in the world, having slipped marginally behind Asia in the April survey.

Even so, sales forecasts remained extremely optimistic. Almost three quarters (72%) of CEOs surveyed in Africa expected turnover to increase by 10% or more over the next 12 months.

Fixed investment plans stay on course: Investment confidence in Africa is the world’s highest, even though this component of the index dipped 2.6 points to 63.0 in the first quarter. Almost half (46%) of survey participants expected to step up capital spending in the coming quarters.

Employment projections little changed: CEOs expressed similar plans for hiring in April as they did in January, with 37% expecting to add new workers over the next 12 months. The majority (56%) planned to keep head counts about the same.