| | With 63 per cent of UK
CEOs believing recovery
in the economy will
occur in 2010 there are
signs for cautious
optimism according to
the
PricewaterhouseCoopers
(PwC) 13th annual Global
CEO survey launched at
the World Economic Forum
in Davos.
This rising
confidence appears to
have been translated
into a boost in
employment with 42 per
cent of UK business
leaders planning to
increase their headcount
in the next 12 months.
This response, combined
with recent ONS
unemployment figures
showing a slight
improvement, suggests
the UK job market
outlook is more positive
than it has been for
some time.
UK business leaders
are more upbeat than
their European
counterparts when it
comes to recruitment. In
the Netherlands only 34
per cent of CEOs expect
to increase headcount,
followed by France (30
per cent), Italy (29 per
cent), Germany (27 per
cent) and Spain (9 per
cent) but while the UK
is leading the European
pack, further afield
Brazil (61 per cent),
India (59 per cent) and
China (53 per cent) are
showing an even quicker
return to bolstering
their workforces.
Despite the positive
outlook for employment,
three quarters of UK
CEOs expect consumers | |
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| | will spend less and save
more and, as a
consequence, 63 per cent
plan to make some change
to their business and a
further 13 per cent plan
to make a significant
change as they manage
the impact of shifting
consumer behaviour.
Since last year, a
more positive outlook
has emerged for the
mergers and acquisitions
market with 14 per cent
of business leaders
(compared with 7 per
cent in 2009) now saying
it is a route to growing
their business, although
this is some way behind
pre-recession levels.
Business growth looks
set to remain home grown
as only 14 per cent of
UK CEOs in 2010 see new
geographic markets as an
opportunity to grow
their business, compared
with 22 per cent in 2009
and 28 per cent in 2008.
Ian Powell, UK
Chairman and Senior
Partner,
PricewaterhouseCoopers
LLP, commented: “It is
encouraging to see that
UK CEOs are beginning,
if somewhat cautiously,
to prepare for an
upturn. Growth
expectations have been
severely impacted by the
challenges of the
financial and economic
crisis and the fears of
a protracted recession
are beginning to recede.
“However, there
remain significant
variances in UK business
leaders’ short term and
long term outlooks,
perhaps as a result of | |
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| | PricewaterhouseCoopers
LLP, commented: “The
optimism for
international
coordination and for
more effective
governmental
collaboration with
business is one of the
major findings of the
survey this year – one
that can reset the
relationship between
business and government.
“Governments are
facing a conundrum – how
to deal with ever more
debt at a time when the
needs of businesses and
citizens for support are
rising, with the
economic downturn
resulting in greater
numbers of unemployed
and disadvantaged people
needing state
assistance.
“Most importantly,
governments must
continue to re-build
confidence and public
trust, reduce
uncertainty further
through leadership and
vision, and create
policies and mechanisms
for collaboration that
are appropriate for
today’s global flows of
capital”.
Key report
findings:
• A quarter of UK
CEOs are very confident
about revenue growth in
the next 12 months – an
increase of 10% on the
previous year. This
compares with 91 per
cent of CEOs who are
more confident about
prospects over the net 3
years.
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• This year 46% of UK
CEOs are very confident
compared to 29% in 2009.
91% are very/somewhat
confident compared to
88% in 2009.
• 63 per cent of UK
business leaders believe
recovery in the economy
will occur in 2010.
• While 50 per cent
of UK CEOs believe
recovery in their
industry will occur in
2010, 26% do not expect
to see their sector
recover until 2011
• Better penetration
of existing markets is
seen as the main
opportunity for business
growth in the next 12
months.
• The top three
threats in the UK are
exchange rate
volatility,
over-regulation and
macroeconomic
imbalances.
• 59% of UK CEOs
think that compliance
and reporting to meet
capital market
requirements will become
more difficult. Access
to capital from
alternative investors
and through equity
markets are less of a
worry.
• 74% of UK CEOS in
the UK are planning to
implement a cost
reduction initiative in
the coming 12 months.
• 42% of UK CEOs are
planning to increase
headcount, 30% of UK
CEOs will keep headcount
the same, 28% of UK CEOs | |
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| | concerns about how UK
public debt levels are
reduced and the
continued limitation in
lending. Across the
world outlook is even
more divided
geographically with
emerging economies
showing much stronger
signs of confidence than
CEOs in the developed
territories.
“The upturn in
employment prospects
will be widely welcomed
but this news must be
tempered given that the
bounce-back may be a
response to employment
cuts made in the UK over
the last 12 months.”
“The fact CEOs are
less likely to seek out
new geographic markets
is a significant
concern, given the risk
it places on UK
competitiveness. Seeking
out business growth
opportunities from
overseas is vital to
future recovery and
long-term sustainable
business growth,” Ian
Powell warns.
Drawing on the
results of the CEO
Survey, and adding to it
with valuable insights
from key government
officials, PwC’s Public
Sector Research Centre
has published a report
entitled “Rethinking and
Reshaping the business
environment: Government
and the Global CEO”.
Jon Sibson,
government and public
sector leader, | |
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