| | Two years removed from
the depths of recession,
CEOs’ confidence in
future growth has
returned to nearly
pre-crisis levels,
according to PwC’s 14th
Annual Global CEO
Survey. In the worldwide
poll of 1,201 CEOs, 48%
said they were “very
confident” of growth in
the next 12 months.
That’s a major shift
from the 31% last year
who were “very
confident” last year and
approaches the 50%
reached in 2008 before
the onslaught of the
economic crisis.
In total, 88% of CEOs
said they now have some
level of confidence for
prospects in the next 12
months, up from 81% last
year. Longer term, 94%
now are confident of
growth three years from
now, an increase of two
percentage points.
Renewed confidence
was spread across all
continents, with CEOs in
India, Austria,
Colombia, Peru, China,
Thailand and Paraguay
particularly upbeat
about near term growth. | |
|
| | Regionally, CEOs in
Western Europe were the
least confident. German
CEOs were an exception,
with nearly 80% of CEOs
“very confident”, up
from about 20% last
year. The survey results
were released at the
World Economic Forum
annual meeting in
Davos.
CEOs said they
considered China the
most important country
for future growth. China
was named by 39% of
CEOs, followed by the
US, 21%; Brazil, 19%;
and India, 18%. And
China, the US and India
were seen as the most
important future sources
for products and raw
materials. Regionally,
90% of CEOs said they
expect their operations
to grow in Asia in the
next 12 months, followed
by Latin America, 84%;
Africa, 75%; the Middle
East, 72%; and Eastern
Europe, 70%. But just a
third of respondents
said the country in
which they are based
offers high growth
potential.
Strategically, the | |
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| | are growing at rates
that far surpass the
developed nations. The
shift in the economic
balance of power creates
challenges for CEOs in
deciding how and where
to invest in facilities,
people and innovation.
Companies that
understand and
capitalise on the
diverging growth
patterns of the
developed and emerging
economies will be the
winners in the years
ahead,” he added.
The positive momentum
in CEO confidence was
reflected in hiring
plans; more than half
(51%) of CEOs worldwide
said they expected to
add jobs in the next 12
months, up from 39% in
the last survey. CEOs in
Central Europe, Asia
Pacific and Africa were
particularly bullish
about hiring.
Significantly, just 16%
of CEOs said they
expected to cut their
workforce in the coming
year, down from 25% last
year.
The impact of the
recession on strategy | |
|
| | was also evident in the
survey results. Most
CEOs – 84% – said they
had changed their
company’s strategy in
the past two years, and
about a third said the
change was fundamental.
Strategic changes were
driven primarily by
economic uncertainty,
customer requirements,
and the post-recession
dynamics in their
industry. Most CEOs said
they plan to change
their strategies for
managing talent (83%),
risk (77%), investments
(76%), and
organisational structure
(74%).
Fewer CEOs, 64%, said
they planned to cut
costs in the next 12
months, down from about
70% last year. And 34%
said they would complete
a merger or acquisition,
half expect to form a
new strategic alliance
or joint venture, and
31% said they would
outsource a business
function. Western
Europe, Asia and North
America were the most
popular venues for M&A. | |
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