Late last month, HSBC presented its biannual CEO Business Confidence Survey, which showed that local CEOs are increasingly bullish about the Bermuda economy.

As was reported at the time in this newspaper, confidence among the 100-plus respondents increased in December from June, although the rate of increase had slowed slightly from the previous period. The survey was conducted by Total Research Associates Ltd in conjunction with Canadian firm Corporate Research Associates Inc, and was sponsored by HSBC.

The study dealt with a number of other areas, such as capital investment, problems facing Bermuda and business and more, and at the presentation there was an enthusiastic discussion about what Bermuda can do to accelerate the economic recovery and how can it diversify the economy.

That discussion will continue, but the report also dealt with hiring expectations, which is a key component of economic growth and the focus of this column.

The good news is that more than a quarter of CEOs, some 27 per cent, plan to hire this year. Sixty-three per cent expect their staff numbers to remain the same and only 8 per cent project a reduction in employees.

That may not seem significant, but what is important is that these numbers are growing in strength. In the previous survey, 26 per cent of CEOs said they expected to hire more staff, 62 per cent said they expected to retain their staffing levels and 10 per cent predicted a decline. So although the changes are small, the trend is positive and the net increase is substantially higher.

The predictions are borne out by results. In 2014, 18 per cent of CEOs said they expected to hire more staff, but 28 per cent actually did so by the end of 2015, while 19 per cent said they expected to decrease staff, but just 16 per cent actually reduced employment levels.

That not only shows that 2015 did show improvement, it seems to bear out the validity of the survey, allowing of course for changes in circumstances during the year.

The other key finding from the survey is that 82 per cent of CEOs expected to hire staff locally, and 88 per cent of those saying they will hire locally expect to hire Bermudians.

The survey does caution that the small sample number in these areas does mean that some care needs to be taken. But it suggests that at least six or seven out of ten new hires in 2016 will be Bermudian.

This also confirms that the vast majority of CEOs would prefer to hire Bermudians. Leaving everything else aside, it is easier and cheaper than hiring someone who requires a work permit and may be relevant to the current debate over Pathways to Status.

On the whole, the numbers are quite encouraging. If they hold true, there should be a net increase in employment.

Some cautionary notes are necessary. The survey was taken before the Budget, which increased payroll tax and that may affect the hiring projections since any increase in overhead will dampen hiring. The Government believes that economic growth will be strong enough to offset tax increases, and it will be interesting to see the responses in the June BCI and whether it has had an effect.

The other cautionary note is that growth in confidence (though not confidence itself) seems to be tapering off.

The confidence index jumped strongly between December 2014 and June 2015 — from 100 to 105.5, but only increased from 105.5 to 106.5 between June and December 2015. The hiring projects reflect the same kind of change; there was a much bigger change in the first half of 2015 than in the second half.

More worryingly, the confidence of CEOs with operations only in Bermuda grew pretty strongly between June and December 2015 (from 104.5 to 106.7), confidence of CEOs with operations both in and outside of Bermuda dropped from 108 to 106 having surged in the previous period.

It is hard to speculate on why this should be so and there is not enough data to know if this is a leading indicator (ie that local companies will be affected by changes later than companies with local and overseas operations) but if that is the case, then it may be that Bermuda’s economic recovery is slowing down, which would be disappointing.

The 19th-century German General Helmuth von Moltke is quoted as saying: “No plan of operations extends with any certainty beyond the first contact with the main hostile force” which is usually paraphrased as: “No plan survives contact with the enemy.”

Similarly, no survey on expectations survives contact with actual events. But the BCI report does suggest that CEOs are feeling more confident than ever, and if we have learnt anything over the last six years it is that confidence breeds confidence and makes a virtuous circle, while fear breeds fear and leads to a downward spiral. So let’s hope the CEOs’ confidence survives contact with events and keeps growing.

Bill Zuill is a director of Bermuda Executive Services Ltd, which was recently named as Bermuda’s Best Employment Agency for 2015 by The Bermudian Magazine. This column and others can be found at www.bermudaemployment.com