Only 36% of CEOs worldwide are ‘very confident’ of their company’s growth prospects in the next 12 months, according to PwC’s 16th Annual Global CEO Survey. 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% 0f 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). Even in Africa, seen by many as the next high-growth economy, CEO confidence in company growth slipped to 44%, from 57% last year.
Latin American CEOs, however, bucked the trend. Their short term confidence rose to 53% of CEOs, up slightly from last year.
At the country level, confidence varied widely: CEOs are most confident in Russia where 66% are very confident of revenue growth in 2013, closely followed by India (63%) and Mexico (62%). They were trailed by countries including Brazil (44%), China (40%), Germany (31%), the US (30%), the UK (22%), Japan (18%), France (13%) and finally Korea, where only 6% of CEOs are very confident of revenue growth in the year ahead. [see note 2]
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. CEOs in Africa and the Middle East were most confident of long term growth, at 62% and 56% respectively. In North America, 51% were 'very confident' of long term growth, while 52% in Asia Pacific were very confident. Long term confidence was weakest in Europe at 34%.
Releasing the survey results on the first day of the World Economic Forum annual meeting in Davos, 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.
"We find CEOs working to deal with the ongoing risks. Strategically, CEOs continue to refine their operations, looking to cut costs without reducing value as they manage through sluggish times. They are seeking growth opportunities organically, avoiding large outlays that could strap resources for the future. Most important, they have a clear focus on customers, collaborating with them more closely than ever on programmes to stimulate demand, loyalty and joint innovation," he said.