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DGAP-News: CEOs Say Prospects Gloomy for Global Economy
ID: 560162
(firmenpresse) - PwC
24.01.2012 18:30
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Uncertainty dampens outlook for 2012
But confidence in company revenue growth remains ahead of 2009
DAVOS, SWITZERLAND, Jan. 24, 2012 (GLOBE NEWSWIRE) -- Nearly half (48%) of CEOs
polled worldwide believe the global economy will decline even further in the
next 12 months, according to PwC's 15th Annual Global CEO Survey. Just 15% said
the global economy will improve during 2012.
However, nearly three times as many CEOs are confident in their own companies'
growth prospects for the next 12 months than in the outlook for the global
economy, suggesting CEOs believe they have learned how to manage through
difficult and volatile economic times.
Forty per cent of CEOs said they are 'very confident' of revenue growth for
their companies in the next 12 months, down from the 48% last year ? though
still up from the 31% who were 'very confident' in 2010.
In addition, more than half of CEOs worldwide expect to increase headcount in
the next 12 months, although the picture changes from sector to sector with
hiring much more likely in entertainment and media than elsewhere.
Unsurprisingly, the biggest decline in confidence was in Western Europe. Beset
by the sovereign debt crisis, just a quarter of European CEOs said they were
very confident of revenue growth, down sharply from nearly 40% last year.
Short-term confidence also fell among CEOs in Asia Pacific, to 42% from 54%
last year. China saw the biggest decline in confidence in the Asia Pacific
region with 51% of CEOs feeling 'very confident', down from 72% last year.
There was also a marked decline in confidence in India with only 55% of Indian
CEOs very confident of revenue growth, down from 88% last year. In the US, 41%
of CEOs said they were very confident of short-term growth, down from 45% last
year. Confidence increased, however, among CEOs in Africa, where 57% said they
were expecting growth, up from 50% last year.
The survey results, based on interviews with 1,258 CEOs, were released at the
World Economic Forum annual meeting in Davos.
Looking at what is worrying CEOs, 80% of CEOs had some concern about uncertain
economic growth, 64% about instability in the capital markets, 66% about
government responses to fiscal deficits and debt burden, 58% about exchange
rate volatility, and 56% about over regulation. And, while 56% of CEOs said
their company had been financially affected by the sovereign debt crisis in
Europe; 45% said they had taken steps to respond.
'CEO confidence is decidedly down as they deal with the aftershocks to the
recession. CEOs are disappointed with the course of the global economy and the
pace of recovery. The optimism that had been building cautiously since 2008 has
begun to recede,' said Dennis M. Nally, Chairman of PricewaterhouseCoopers
International.
'The ongoing debt crisis in the European Union, along with other lingering
economic uncertainties, has deflated confidence in business growth around the
world. Even the fast growing economies of Asia and Latin America are not immune
to the realities of continued economic stagnation, belying the notion that the
global economy has decoupled. CEOs all around the world are concerned about the
health of the global economy.
'The good news is that the long cycle of the slowdown has taught CEOs how to
manage their businesses with ever greater efficiencies,' Mr. Nally added. 'CEOs
now say they are better prepared to deal with an economy defined by volatility
in global markets, weak demand in developed economies, and uncertainty in the
emerging markets. Many CEOs are confident they can deliver revenue growth
despite the difficult conditions.'
Longer term, CEO confidence also declined; 46% said they were 'very confident'
of growth prospects in the next three years, down five percentage points from
last year. CEOs in Western Europe and Latin America were least confident of
long-term growth, while 54% of North American CEOs were very confident of
long-term growth.
Growth opportunities
According to the CEOs, the best strategic growth opportunities in the next 12
months will come from increasing share in existing markets and from developing
new products and services, both cited by nearly one third of respondents. New
market penetration, 18%, and joint ventures and alliances, 10%, trailed as
growth strategies. The number of CEOs planning M&A activity remains relatively
low with prospects for a recovery in the deals market still looking some way
off.
The emerging markets remain a vital growth opportunity for CEOs. Overall, 59%
agreed that growing markets were more important to their company's future than
more developed economies. And almost half of CEOs from developed nations said
that emerging markets were the most important to their future. Top growth
targets were the BRIC countries (Brazil, Russia, India and China), joined by
the U.S. and Germany. In all, when asked to select the top three targets for
growth, more than 60 different countries were named by CEOs.
The Talent Challenge
Finding and keeping the right talent remains a top concern for CEOs. Only 30%
said they are 'very confident' they will have access to the talent needed to
execute their company's strategy, and 43% believe that it has become more
difficult to hire workers in their industry. Recruiting and retaining high
potential middle managers is the biggest talent challenge, CEOs said, followed
by hiring skilled production employees and younger workers.
This challenge cuts across all industries, even those with different talent
needs, such as industrial manufacturing and pharmaceuticals.
Despite the sluggish economy, businesses are gearing up to hire. More than half
of CEOs said they have increased headcount in their organisation in the past 12
months and about the same percentage expect hiring momentum to continue. CEOs
in Middle East/Africa and North America reported hiring increases in the past
12 months, while CEOs in Asia said they are most likely to add jobs in the
coming year. Just 18% of CEOs said they expected to cut their workforce in the
coming year, down from 23% who said they made cuts in the past 12 months.
'It's ironic that as the economy struggles, shortages of key personnel are
having an impact on the way companies do business,' Mr. Nally said. 'CEOs say
they are having difficulty finding and retaining skilled people in their
industries and turnover in emerging markets is high. The problem is expected to
become more acute as global demographic patterns change.'
A potential shortfall of talent was also cited by 53% of CEOs as a threat to
growth. The availability of skills was seen as a top concern across all
geographic regions outside of Europe. Other frequently cited threats to growth
included potential tax increases, cited by 55%; changing consumer spending
patterns and behaviours, 50%; energy costs, 46%; inability to finance growth,
40%; new market entrants, 38%; supply chain security, 34%; and inadequacy of
basic infrastructure, 30%.
Notes to editor
Survey Methodology:
For PwC's 15th Annual Global CEO Survey, 1,258 interviews were conducted in 60
countries in the last quarter of 2011. 291 interviews were conducted in Western
Europe, 440 in Asia Pacific, 150 in Latin America, 236 in North America, 88 in
Central and Eastern Europe, and 53 in the Middle East&Africa.
The full survey report with supporting graphics can be downloaded at
www.pwc.com/ceosurvey.
PwC's 15th Global CEO Survey was launched at a press conference in Davos on the
eve of the World Economic Forum's Annual Meeting. To download broadcast-quality
clips from the press conference and other supporting footage, visit
http://press.pwc.com. To watch the full webcast of the press conference, visit
http://www.pwc.com/davoswebcast.
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for. We're a network of firms in 158 countries with close to 169,000 people who
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Tell us what matters to you and find out more by visiting us at www.pwc.com.
'PwC' is the brand under which member firms of PricewaterhouseCoopers
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their professional judgment or bind them in any way.
The PwC logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=2684
(c) 2012 PricewaterhouseCoopers. All rights reserved.
Mike Ascolese, PwC
Tel: +1 (646) 471 8106
e-mail: mike.ascolese(at)us.pwc.com
Mike Davies, PwC
Tel: +44 (0) 78 0397 4136 On site at Davos
e-mail: mike.davies(at)uk.pwc.com
www.pwc.com/ceosurvey
News Source: NASDAQ OMX
24.01.2012 Dissemination of a Corporate News, transmitted by DGAP -
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Datum: 24.01.2012 - 18:30 Uhr
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