Majority of CEOs say global economy to remain stalled in 2013
Fiscal deficits, over-regulation and the economy top concerns in PwC's 16th Annual Global CEO survey
Only 36% of CEOs worldwide are ‘very confident’ of their company’s growth prospects in the next 12 months, according to PwC’s 16th Annual Global CEO Survey. That's down from 40% who were 'very confident' of short term growth last year and 48% in 2011, but still above the lows of 31% and 21% in 2010 and 2009.
Looking at the economy generally, 28% of CEOs say the global economy will decline further in 2013, and only 18% predict economic improvement; 52% say it will stay the same. While the CEOs’ outlook remains gloomy, the forecast is an improvement on last year when 48% of CEOs predicted the global economy would decline in 2012.
Longer term, overall CEO confidence remained stable; 46% of CEOs worldwide said they were very confident of growth prospects in the next three years, about the same as last year. CEOs in Africa and the Middle East were most confident of long term growth, at 62% and 56% respectively. In North America, 51% were 'very confident' of long term growth, while 52% in Asia Pacific were very confident. Long term confidence was weakest in Europe at 34%.
Releasing the survey results on the first day of the World Economic Forum annual meeting in Davos, Dennis M. Nally, Chairman of PricewaterhouseCoopers International, said:
“CEOs remain cautious about their short term prospects and the outlook for the global economy. However, given the high levels of concern among CEOs about issues - such as over-regulation, government debt, capital market instability - it is no surprise that CEO confidence has declined in the last 12 months.”
What worries CEOs most?
As the difficult economic conditions persist, CEOs are generally more worried about a wider range of issues than they were a year ago. Top of the list, a concern among 81% of CEOs about continuing uncertainty over economic growth.
Sending a clear message to governments around the world, other key CEO worries are the government response to the fiscal deficit (71%), over-regulation (69%) and lack of stability in capital markets (61%). CEO concerns about over-regulation are at their highest since 2006. When asked directly about the government response to the regulatory burden, CEOs are even more blunt, with just 12% agreeing that their government has reduced the regulatory burden in the last year.
When asked about the major threats to their business growth, CEOs also cited the increasing tax burden (62%), availability of key skills (58%) and the cost of energy and raw materials (52%).
Dealing with disruption
In order to build organisations that can survive and thrive amid disorder, CEOs are pursuing three specific strategies: targeting pockets of opportunity, concentrating on the customer and improving operational effectiveness.
Jobs and the search for talent
CEOs remain relatively cautious on plans for increasing headcount for this coming year. 45% of CEOs plan to recruit in 2013 (down from 51% in 2012) while 23% plan to reduce the size of their workforce.
Looking at which industries are recruiting and which are shedding jobs shows an interesting picture. CEOs most likely to be increasing headcount are in business services (56%), engineering and construction (52%), retail (49%) and healthcare (43%). While the biggest number of CEOs planning headcount reductions are in banking (35%), the metal industries (32%) and forestry and paper (31%).
Addressing public trust
CEOs also recognise the need to build trust with a wider set of stakeholders. 37% worry that lack of trust in their industry could endanger their company’s growth, and 57% plan to focus more heavily on promoting an ethical culture. In addition, nearly half of CEOs (49%) plan to put more effort into reducing their environmental footprint in the next 12 months.
Τhe views of Cypriot CEOs
It is worth noting that in the context of the global CEO survey, PwC Cyprus, for the second consecutive year, carried out a separate study for Cyprus which includes the views of 32 Cypriot CEOs. The results of the local survey will be presented during an event organised by PwC Cyprus on Wednesday, 30 January 2013.
Fiscal deficits, over-regulation and the economy top concerns in PwC's 16th Annual Global CEO survey
Only 36% of CEOs worldwide are ‘very confident’ of their company’s growth prospects in the next 12 months, according to PwC’s 16th Annual Global CEO Survey. That's down from 40% who were 'very confident' of short term growth last year and 48% in 2011, but still above the lows of 31% and 21% in 2010 and 2009.
Looking at the economy generally, 28% of CEOs say the global economy will decline further in 2013, and only 18% predict economic improvement; 52% say it will stay the same. While the CEOs’ outlook remains gloomy, the forecast is an improvement on last year when 48% of CEOs predicted the global economy would decline in 2012.
Longer term, overall CEO confidence remained stable; 46% of CEOs worldwide said they were very confident of growth prospects in the next three years, about the same as last year. CEOs in Africa and the Middle East were most confident of long term growth, at 62% and 56% respectively. In North America, 51% were 'very confident' of long term growth, while 52% in Asia Pacific were very confident. Long term confidence was weakest in Europe at 34%.
Releasing the survey results on the first day of the World Economic Forum annual meeting in Davos, Dennis M. Nally, Chairman of PricewaterhouseCoopers International, said:
“CEOs remain cautious about their short term prospects and the outlook for the global economy. However, given the high levels of concern among CEOs about issues - such as over-regulation, government debt, capital market instability - it is no surprise that CEO confidence has declined in the last 12 months.”
What worries CEOs most?
As the difficult economic conditions persist, CEOs are generally more worried about a wider range of issues than they were a year ago. Top of the list, a concern among 81% of CEOs about continuing uncertainty over economic growth.
Sending a clear message to governments around the world, other key CEO worries are the government response to the fiscal deficit (71%), over-regulation (69%) and lack of stability in capital markets (61%). CEO concerns about over-regulation are at their highest since 2006. When asked directly about the government response to the regulatory burden, CEOs are even more blunt, with just 12% agreeing that their government has reduced the regulatory burden in the last year.
When asked about the major threats to their business growth, CEOs also cited the increasing tax burden (62%), availability of key skills (58%) and the cost of energy and raw materials (52%).
Dealing with disruption
In order to build organisations that can survive and thrive amid disorder, CEOs are pursuing three specific strategies: targeting pockets of opportunity, concentrating on the customer and improving operational effectiveness.
Jobs and the search for talent
CEOs remain relatively cautious on plans for increasing headcount for this coming year. 45% of CEOs plan to recruit in 2013 (down from 51% in 2012) while 23% plan to reduce the size of their workforce.
Looking at which industries are recruiting and which are shedding jobs shows an interesting picture. CEOs most likely to be increasing headcount are in business services (56%), engineering and construction (52%), retail (49%) and healthcare (43%). While the biggest number of CEOs planning headcount reductions are in banking (35%), the metal industries (32%) and forestry and paper (31%).
Addressing public trust
CEOs also recognise the need to build trust with a wider set of stakeholders. 37% worry that lack of trust in their industry could endanger their company’s growth, and 57% plan to focus more heavily on promoting an ethical culture. In addition, nearly half of CEOs (49%) plan to put more effort into reducing their environmental footprint in the next 12 months.
Τhe views of Cypriot CEOs
It is worth noting that in the context of the global CEO survey, PwC Cyprus, for the second consecutive year, carried out a separate study for Cyprus which includes the views of 32 Cypriot CEOs. The results of the local survey will be presented during an event organised by PwC Cyprus on Wednesday, 30 January 2013.
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