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16 April 2024

Survey finds fear of recession prime concern among world’s chief executives

By Agencies


Chief executives from New York to Tokyo are wary that a global recession could put a halt to growth as prospects for business confidence declined for the first time since 2003.

Those were the primary findings in the annual PricewaterhouseCoopers survey of CEOs from around the world that was released Monday on the eve of the World Economic Forum.

The survey found that just 50 per cent of CEOs were “very confident” about their growth in the coming year, compared to 52 per cent last year. That was the first time since 2003 the figure had declined.

It was the first time since the survey began 11 years ago that the survey emphasized growth as the chief concern.

The difference in sentiment is clear, said Samuel A. DiPiazza, global CEO of New York-based consulting firm PricewaterhouseCoopers.

“The credit crunch and the slowdown in the Western economies have created a clear split in the confidence levels of CEOs around the world,” he said. “The possibility that the downturn could worsen into recession looms large for CEOs in established economies like the US and Western Europe.”

But in Asia, for example, and other emerging economies, CEO confidence “remains strong, perhaps because they have experienced nothing but rapid expansion for a decade or more.”

The overall drop in business confidence was most prevalent in North America, where only 35 per cent of CEOs said they were “very confident” about growth, compared to 53 per cent in 2007. Confidence among Western European CEOs dropped to 44 per cent, down by eight percentage points from last year.

But in contrast, CEO confidence in the burgeoning economies of Asia, Latin America and Central and Eastern Europe, rose to about 55 per cent in each of the regions.

China and India, not surprisingly, posted high confidence - where 73 per cent and 90 per cent of CEOs, respectively, said they were “very confident” about growth in the next year.

As for other issues, only 34 per cent of CEOs cited climate change, down from 40 per cent last year. Four-fifths of the CEOs polled said government action should be called in to help reduce emissions.

They said that even as a 59-per cent majority maintained their belief that there was too much regulation by governments, down from 73 per cent last year.

The threat of terror and pandemics, once major concerns, were cited by just 31 per cent and 28 per cent of respondents, respectively, this year.

Despite fears of a recession, 31 per cent of the CEOs said they planned at least one cross-border acquisition or merger in 2008, with interest in mergers the highest in Asia, given the confidence levels of CEOs there.

The survey was based on 1,150 interviews with CEOs in 50 countries from October to December. Most were done by telephone, but others were done by mail in Japan and face-to-face in Kenya and China. The names of the CEOs and their companies were not released. (AP)