Daily News: January 23, 2013

PwC: CEO Confidence in Growth Down


According to 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. 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.

CEOs in Western Europe were least confident of short term revenue growth. Faced with ongoing recession, just 22% of Western European CEOs said they were very confident of growth, down from 27% last year and 39% in 2011. Confidence in short term growth also declined in North America to 33% (42% in 2012) and in Asia Pacific to 36% (42% in 2012).

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.”

Other survey highlights included:

  • 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.

  • 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.

  • In order to build organizations 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.

  • CEOs remain relatively cautious on plans for increasing headcount for this coming year. Forty-five percent of CEOs plan to recruit in 2013 (down from 51% in 2012) while 23% plan to reduce the size of their workforce.

  • CEOs also recognize the need to build trust with a wider set of stakeholders. Thirty-seven percent 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.

    For more information on the PwC survey, click here.