27 January, 2012
Business leaders are continuing to lose confidence in the global economy despite a more optimistic outlook for their own growth, according to a new survey.
PricewaterhouseCoopers’ annual Global CEO Survey shows nearly half (48 percent) of CEO’s believe the global economy will decline even further in the next 12 months.
Just 15 percent of the 1,258 CEOs polled worldwide say the global economy will improve this year.
However, nearly three times as many CEOs are confident in their own companies’ growth prospects for the same period.
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.
It was also good news for Australia as a whole – rated by CEOs as one of the top ten countries that was most important for their companies’ overall growth prospects.
PwC Australia CEO Mark Johnson says that CEOs from around the world consider Australia as a strategic market, ranking it among the likes of China, the US, Brazil, India and Germany.
“Increasingly we are being seen as a place for long-term and diverse business opportunities and not just as a mine, a farm or a beach,” Johnson says.
EUROZONE DEBT CRISIS
Unsurprisingly, the biggest decline in confidence about revenue growth this year came from Western Europe, where just a quarter of CEOs said they were ‘very confident’.
This has flowed through to Australian CEOs, with only 44 percent feeling ‘very confident’ of revenue growth over the next 12 months, down from 50 percent last year.
Johnson says that the results of this year’s survey shows that the debt crisis in the Eurozone is dampening confidence in business growth all around the world.
“Some of the optimism that had been building tentatively since the GFC is now starting to erode, as CEOs appear to be disappointed by the rate of global economic recovery,” he says.
GROWTH OPPORTUNITIES
Despite the pessimistic outlook, many CEOs remain confident in their own ability to grow their business, suggesting they have become accustomed to operating in a volatile global economy.
According to 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 percent) and joint ventures and alliances (10 percent) trailed as growth strategies.
The PwC Global CEO Survey was released at the World Economic Forum annual meeting in Davos, Switzerland.