DAVOS, Switzerland, Jan. 26, 2010 (GLOBE NEWSWIRE) -- With their worst fears of prolonged recession behind them, CEOs' confidence for future growth has bounced back from the gloomy prospects of a year ago, according to PricewaterhouseCoopers 13th Annual Global CEO Survey.
This rising confidence has translated into a planned boost in recruitment, with nearly 40 per cent of CEOs expecting to increase their headcount this year. That contrasts with 25 per cent of CEOs planning job cuts over the next year, down from nearly half who decreased headcount in the past 12 months.
In Asia Pacific and Canada about half of CEOs are looking to increase employment in 2010, and this figure leaps to over 60 per cent in Brazil. Meanwhile, nearly a fifth of UK CEOs say they expect their headcount to rise by more than 8 per cent in 2010.
Overall, the survey found that 81 per cent of CEOs worldwide are confident of their prospects for the next 12 months, while only 18 per cent said they remained pessimistic. The results compare with 64 per cent who said they were confident a year ago and 35 per cent who were pessimistic. Thirty-one per cent of CEOs said they were now "very confident" of their short term prospects, up 10 percentage points from last year, a low point in CEO confidence since PwC began its tracking.
The survey revealed striking differences in confidence levels among CEOs in emerging economies and those in developed nations. In North America and Western Europe, for example, about 80 per cent of CEOs said they were confident of growth in the next year. That compared with 91 per cent in Latin America and in China/Hong Kong, and 97 per cent in India. Looking at the longer term, the results were more even. Overall, more than 90 per cent of CEOs expressed confidence in growth over the next three years.
For the future, a total of 60 per cent of CEOs said they expect recovery in their national economies only in second half of 2010 or later, while 13 per cent said recovery was already underway, and 21 per cent said it would set in during the first half of this year. Return to growth was fastest in China, where 67 per cent of CEOs said recovery had begun in 2009. However, nearly two-thirds of CEOs in the US and more than 70 per cent in Western Europe said the turnaround would not begin until the half of 2010.
"The fears of a global economic meltdown have receded and CEOs are more upbeat about their prospects," said Dennis M. Nally, Global Chairman of PricewaterhouseCoopers. "CEO confidence is tempered, however, by the slow pace of recovery and the impact of often drastic cost-cutting and other steps taken to survive the downturn. The emerging economies are clearly recovering at a faster pace than those that are more developed. Companies with the best prospects for early recovery are those who managed through the recession while keeping an eye to the recovery ahead."
"The timing of the recovery will vary depending on geography and industry," Mr. Nally said. "In some fast-growing economies the turnaround is well under way; but CEOs in the countries hardest hit by the crisis see its effects remaining through 2010 and beyond. CEOs must now shift their mindset to making strategic decisions about investing in growth in order to gain competitive advantage."
Other key findings of the 13th Annual PwC Global CEO Survey:
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Protracted global recession remains the biggest overall concern of CEOs around the world (65 per cent), followed closely by fear of over-regulation (60 per cent).
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CEOs were very clear about the threat of over-regulation. Over Two-thirds of CEOs disagreed with the notion that governments have reduced the overall regulatory burden.
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To combat recession, nearly 90 per cent of all CEOs said their companies had initiated cost-cutting measures in the past 12 months, led by those in the US, Western Europe and the UK. And nearly 80 per cent overall said they would seek cost cuts over the next three years.
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Over one in four CEOs believe their industry's reputation has been tarnished by the downturn. However, 61 per cent of CEOs in the banking and capital markets sector said there has been a fall in trust in their industry.
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Risk management took on greater importance among CEOs as a result of the recession. Forty-one per cent of CEOs plan to make major changes to their company's approach to managing risk.
- More than 60 per cent of CEOs said their companies are preparing for the impact of climate change initiatives and believe those efforts will improve their company's reputation.
"CEOs will be in a post-survival mode in the coming months. Their most common regret about how they dealt with the recession was not fully understanding the risks, and failing to respond more quickly," said Mr. Nally. "The importance of managing risk was the most often cited lesson to emerge from the financial crisis. CEOs are learning to balance risk management with decisiveness and flexibility as they seek to return to prosperity."
Notes to editors:
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The full survey report plus supporting graphics can be downloaded at www.pwc.com/ceosurvey.
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