Asia Pacific CEOs have strong confidence in growth

New PwC survey finds CEOs looking to domestic markets for opportunities

KUALA LUMPUR, 6 November 2011 – More than half of CEOs in the Asia-Pacific region are ‘very confident’ of increased revenue for their companies over the next three to five years, up slightly from a year ago.  More than 40% of CEOs say their single greatest opportunity for growth will stem from the rise in spending power in Asia, particularly in China.  These were the key findings from a survey by PwC of more than 320 CEOs across 26 countries, including the 21 APEC economies, for the Asia-Pacific Economic Cooperation (APEC) CEO summit. The summit takes place on 10-12 November in Honolulu, Hawaii.

To drive growth CEOs are seeking to expand in Asia’s fast growing consumer markets and to extend their presence in the evolving markets for services.  Over 40% of planned investments, both by domestic Chinese and non Chinese companies, are targeted on China.

The CEOs surveyed remain confident that the economy of the Asia-Pacific region will continue to prosper despite the weak economic recovery in the United States, financial uncertainty in Europe and the tsunami and earthquake that struck Japan earlier this year.

However nearly one-third of CEOs said the weak US recovery had impacted their companies ‘to a great extent,’ while 17% said they had been strongly affected by conditions in Europe.

“Businesses are now planning for a new market reality. The rise in spending power in Asia and the sheer size of the emerging middle class markets across the APEC region offers tremendous opportunity for growth,” said Chin Kwai Fatt, Managing Director, PwC Malaysia.

“The slow recoveries in the US and Europe are proving to be more disruptive than expected. Asian economies will have to look within the region for growth, so inter-regional trade among the APEC-Asia bloc will be even more important,” he continued.

CEOs in the APEC region recognise that cooperation between business and government is critical to economic competitiveness and social well being in the region.  They cited financial sector stability as the top way in which companies can work more closely with government, followed by spreading economic access and opportunity across the population and promoting sustainable growth.

Among other findings of the survey:

Trade

  • If they could send a message to political leaders, two thirds of CEOs put a free trade agreement for the region at the top of agenda for issues that APEC leaders need to address.
  • Inter-regional trade pacts will play a key role in growth for APEC economies; 64% of CEOs said bilateral and regional trade agreements will be more important to their company than multilateral agreements.
  • Nearly 30% of CEOs say protectionist tendencies by their trading partners are a significant barrier to their growth while 32% of CEOs cite corruption as another significant obstacle.

Innovation

  • Companies are changing their approaches towards innovation. More than 80% of CEOs said they plan greater use of emerging technologies such as mobility and cloud computing technologies.
  • APEC companies are seeking to lessen their reliance on traditional energy sources.  One fifth are ‘significantly' raising their commitment to green processes and products.
  • One fifth of CEOs are making significant changes to their innovation strategies to protect intellectual property rights.

Talent

  • A majority of CEOs in APEC economies say they face problems with talent shortages. Nearly half of CEOs based in mature economies have difficulty deploying people overseas.
  • Nearly 40% of CEOs are making ‘significant’ change to their talent strategies to deal with new challenges.
  • More than 40% of CEOs in the region expect to increase their headcount by more than 5% over the next three to five years.

Dennis Nally, chairman of PwC International Ltd, will speak at the opening session of the APEC CEO Summit on November 11th.

 

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Notes to Editors:

About APEC: The Asia-Pacific Economic Cooperation (APEC) forum is the premier economic organisation in the Asia-Pacific region. Established in 1989 by 12 economies, APEC fosters growth and prosperity by facilitating economic cooperation and expanding trade and investment throughout the region. APEC’s 21 member economies today account for 55 percent of global GDP.

The APEC CEO Summit is the Asia-Pacific's premier business event, drawing thousands of economic and business leaders from around the region and beyond. The 2011 CEO Summit will be held from 10-12 November in Honolulu, Hawaii. For more on the APEC CEO Summit and the programme, please visit http://apec2011ceosummit.com/

Survey Methodology:  Carried out by PwC International Survey Unit, the APEC CEO Survey 2011 was conducted between July and September 2011 covering CEOs and industry leaders in 26 countries, including all 21 APEC economies.

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