CEO Confidence Plummets to New Low According to PricewaterhouseCoopers Survey

Depth of the Crisis Impacts All Regions, Sectors

Talent, Over-Regulation Among Top Concerns in PricewaterhouseCoopers Survey

DAVOS, Switzerland, Jan. 28, 2009 (GLOBE NEWSWIRE) -- Battered by recession,
CEOs' confidence about future prospects for business has plummeted and
executives expect a slow, gradual recovery over the next three years,
PricewaterhouseCoopers 12th Annual Global CEO Survey has found. 

CEO confidence plunged to its lowest level since 2003, when PwC began tracking
CEOs' forecasts. Worldwide, just 21 per cent of CEOs said they were very
confident of revenue growth in the next 12 months, down from 50 per cent in
last year's survey. And more than a quarter of CEOs said they were pessimistic
about prospects for the coming year. The survey results were released today at
the World Economic Forum annual meeting in Davos, Switzerland. 

CEOs worldwide were also gloomier about longer term growth as well, predicting
a slow recovery. Only 34 per cent said they were very confident of growth over
the next three years, down from 42 per cent last year, when CEOs were just
beginning to recognise the full impact of the credit crisis on the global
economy. Illustrating the changing mood, CEOs confidence worsened over the
course of the surveying as negative economic news unfolded. 

Pessimism prevailed across all geographic regions, business sectors and levels
of economic development, the survey found. Only 15 per cent of CEOs in North
America and 15 per cent in Western Europe expressed confidence about growth
prospects for the next 12 months. This compared with 21 per cent in the
emerging economies of Central and Eastern Europe, 31 per cent in Asia Pacific,
and 21 per cent in Latin America. 

"The speed and intensity of the recession has rocked the psyches of CEOs and
created a global crisis of confidence," said PricewaterhouseCoopers' Global CEO
Samuel A. DiPiazza, Jr. "CEOs are most concerned about the immediate survival
of their companies. Even in once rapidly emerging economies, companies are now
coping with issues like unavailable credit, sluggish capital markets, and
collapsing demand. 

"The severity and duration of the recession are difficult to predict and CEOs
are balancing the challenges of successfully managing through the downturn
while also remaining prepared for economic turnaround. Their prospects for
recovery are truly connected," he added. 

The impact of the recession in the world's major economies, cited by 85 per
cent of survey respondents worldwide, continued to dominate concerns of CEOs
and was the only risk factor to increase among CEOs' concerns. Other major risk
factors included disruption in the capital markets, cited by 72 per cent,
over-regulation, 55 per cent, energy costs, 50 per cent, and availability of
key talent, 46 per cent. 

Further highlights of the survey results: 

Banking Crisis Pervasive 

CEOs expect the worldwide banking crisis to have a broad impact on business,
affecting companies across all geographic regions and business sectors. Nearly
70 per cent of CEOs said their companies will be affected by the credit crisis.
Of those, nearly 80 per cent said they faced higher financing costs, and nearly
70 per cent said they would delay planned investments as a result. Companies in
the banking, utilities, construction, entertainment and automotive sectors are
most likely to be impacted, CEOs said. 

Those CEOs whose companies were anticipating growth said they would fund it
primarily thorough internal cash flow, followed by the debt and equity markets. 

Long-term Factors Remain on the Agenda 

Despite the severity of current economic conditions, CEOs continued to be
concerned with long term needs. Access to key talent remained a vital concern;
only 26 per cent said they planned to reduce headcount in the coming year,
while 35 per cent planned to maintain staffing levels. 

Moreover, 72 per cent of CEOs predicted that the pressure on natural resources
will worsen in the future. Respondents said that dependence on carbon-based
energy cited by 61 per cent, climate change 56 per cent, overpopulation 55 per
cent, and scarcity of fresh water. 50 per cent, will have an impact on
long-term success. 

About 75 per cent of respondents said they are already responding by developing
new products and services and by making changes to their operations. More than
half expect to make a return on those investments in the next 12 months. 

JVs to overtake cross-border M&A Activity 

The percentage of CEOs who believe that Joint Ventures (JVs) will play a
greater role than M&A in cross-border growth has surged, particularly in
Western Europe and Latin America. This may reflect the lower cost and risk
level associated with JVs, as well as the increasing popularity of
collaboration to deal with the challenges of cross border growth. 

However, merger and acquisition activity has decreased. Only 20 per cent of
respondents said they had completed such a transaction last year. The decline
in M&A was most pronounced in emerging economies in Asia and Eastern Europe.
Cultural differences, unexpected costs and delivering deal value were the three
most common concerns of CEOs in considering M&A. 

Energy and Talent Present Challenges 

Buffeted by the recession and volatile commodity and energy costs, CEOs from
all regions of the world said they were seeking to sustain their businesses and
prepare for economic rebound. Overall, more than 80 per cent said they were
taking steps to reduce energy costs by finding efficiencies in their
operations, and more than half said they were seeking alternative energy
sources. Companies were also investing in technology to reduce energy
dependence and trying to secure future energy supplies. 

Finding and retaining top talent also remains a major priority for CEOs. A
shortage of candidates with essential skills was cited as a key challenge by
nearly 70 per cent of respondents. Other human resource concerns included
recruiting and integrating younger employees, providing attractive career
paths, and competition for talent within their sector. CEOs cited strategies
such as creating more flexible work environments, redeploying key employees and
participation in social activism as means to overcome talent challenges. 

Better Information Needed to Manage Risk 

CEOs recognised a huge gap in the information required to manage risk, and fuel
long-term success. While 92 per cent said information about risk is important,
only 23 per cent said they received comprehensive information about it. In
addition, just 21 per cent get comprehensive information about the needs and
preferences of customers and clients. 

The 'regulation paradox' 

CEOs said they recognise the need to collaborate with government to address
systemic problems. Yet, while 55 per cent of CEOs remain concerned about
overregulation as an obstacle to growth, nearly half also said their
governments have not done enough to create a skilled workforce, and 38 per cent
said governments could do more to improve infrastructure. Likewise, more than
80 per cent of CEOs favoured clear, consistent government policies to address
climate change, but just 28 per cent believe that their governments have such
policies. 

Survey Methodology 

For the PricewaterhouseCoopers 12th Annual Global CEO Survey, 1,124 interviews
with CEOs were conducted in 50 countries during the last quarter of 2008. The
majority of interviews were conducted by telephone. The research was
coordinated by the PricewaterhouseCoopers International Survey Unit, Belfast,
Northern Ireland, in cooperation with project managers and a global advisory
board of PwC partners. By region, 500 interviews were conducted in Europe
(Austria, Belgium, Czech Republic, Cyprus, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Russia,
Spain, Sweden, Switzerland, Turkey, UK, Ukraine), 276 in Asia Pacific
(Australia, China/Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
Singapore, Taiwan, Thailand, Vietnam), 168 in Latin America (Argentina,
Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay,
Venezuela), 138 in North America (U.S., Canada), and 42 in the Middle East and
Africa. 

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CONTACT:  PricewaterhouseCoopers LLP
          Mike Ascolese
            +1 (646) 471 8106
            mike.ascolese@us.pwc.com
          (On site at Davos)
          Simon Reed
            +44 (0) 7703 130 957
            simon.reed@uk.pwc.com