Chief executives downbeat on prospects

SURVEY:ALMOST HALF of global chief executives believe the world economy will decline further over the next 12 months, according to PwC's 15th annual global CEO survey.

The results of the survey – based on interviews with 1,258 chief executives from 60 countries – were released at the World Economic Forum annual meeting in Davos.

In a sign of renewed pessimism about the possibility of an imminent solution to the current financial crisis, some 48 per cent of chief executives predict further deterioration of the global economy over the next year.

Speaking to The Irish Timesfrom Davos, chairman of PwC UK Ian Powell said a significant feature of the survey was that chief executives in emerging economies, as well as those in western Europe and the US, were uncertain about the global economy.

“The survey shows the biggest drop in confidence among chief executives in India and China in five or six years,” he said. “It shows that companies are operating on a global basis. There is a realisation that the markets they are selling into are much more difficult.”

Despite the general lack of confidence about global economic prospects, the survey found that chief executives were more upbeat about the prospects for their own companies.

Some 40 per cent of chief executives surveyed said they were “very confident” of revenue growth in the next 12 months, lower than the figure of 48 per cent recorded last year, but higher than the figure of 31 per cent posted in 2010.

Ian Powell said the relative optimism reflected to the fact that companies had taken action to address the difficulties that had beset their businesses since 2008 and have learned how to manage through difficult economic times.

Dealing with economic difficulties had become a “new norm” for businesses, he said, and firms were now more confident about dealing with uncertainty.

The survey also found that skills shortages remain a concern for chief executives.

Only 30 per cent of respondents believe they will have access to the talent needed to execute their company’s strategy. More than half of chief executives said they had increased headcount in their organisation in the past year.