Growth hopes: CEO confidence falling
Davos, January 23, 2013
Chief executives are less optimistic about short-term growth prospects for their companies than a year ago, according to a survey that offers a reality check on rising stock markets.
Business leaders and policymakers are meeting in Davos in cautious mood, with much of Europe in recession, growth in China and India slowing, and a hoped-for US recovery yet to prove itself.
The annual PricewaterhouseCoopers survey of 1,330 chief executives found only 36 percent were "very confident" of their firm's prospects for revenue growth in the next 12 months, down from 40 percent a year ago. It is the second consecutive year of falling confidence.
Latin America was the only region to buck the global trend, according to the report published on Tuesday as 2,500 delegates, including 1,600 business leaders, gathered in the Swiss Alps for the annual World Economic Forum.
Unsurprisingly, European CEOs were the most pessimistic, with just 22 percent very confident of growth, down from 27 percent last year. Confidence in North America also fell to 33 percent from 42 percent, while Asia slipped to 36 percent from 42 percent.
Even business leaders in Africa - now widely touted as the next high-growth region - were less upbeat than a year ago.
"CEOs see a global economy that is reluctant to recover and that clearly impacts how they think about their own companies' prospects," said Dennis Nally, chairman of PricewaterhouseCoopers International.
"They are running their businesses cautiously, not really prepared to make any significant investments or additions to headcounts until they can get some more clarity."
Companies have responded to tough times by managing operations more tightly. That means cost cutting remains a priority and ambitious investment projects, including big acquisitions, are off the agenda for now.
Continuing uncertainty over economic growth tops the list of CEO concerns, with the problems caused by governments running unsustainable fiscal deficits ranking second. Other issues also keeping company managers awake at night include concerns about excessive regulation and the instability of capital markets.
The prevailing business mood paints a bleak picture for job prospects, with only 45 percent of CEOs planning to recruit in 2013 - down from 51 percent in 2012 - while 23 percent intend to reduce the size of their workforce. - Reuters
More INTERNATIONAL NEWS Stories
- Passports requiring probe were on Malaysia flight
- 40 killed in Yemen as Houthi fighters near capital
- Vietnam finds object in sea; search on
- $5bn poll spend to boost India economy
- Libya authorises use of force against Korean tanker
- Ukraine PM says he will go to US to discuss crisis
- Syrian journalist killed covering fighting
- Malaysian jet may have turned back before vanishing
- No sign of missing plane; Malaysia probes false passports
- Two Europeans not on board 'missing' Malaysian jet
- China draws red line on North Korea
- Saudi sentences three to death for 2003 bombing
- First bitcoin machine opens in UK
- US sanctions will boomerang, warns Russia
- China plans $50bn bank to fund projects
- Sony to sell Tokyo 'birthplace'
- Obama orders sanctions over Russian moves
- Crimea parliament votes to join Russia
- Arab League to be revamped
- 'Upskirting' is legal: Massachusetts court
- Singapore probes 'unnatural' death of bitcoin trader
- Onus on world powers for Syria war crimes: UN
- US, Russia set for talks on Ukraine crisis
- Brent oil drops below $109
- Services outshine manufacturing, pushing up jobs
- Bitcoin bank shut down after hacker attack
- India to kick off world's biggest poll on April 7
- China signals focus on reforms
- Hundreds ready for bitcoin exchange class action
- Space taxi, Jupiter mission in Obama budget