CEOs say prospects gloomy for global economy

Uncertainty dampens outlook for 2012
Managing talent the top target for change for the second year in a row

KUALA LUMPUR, 25 January 2012 – Nearly half (48%) of the 1,258 CEOs polled worldwide believe the global economy will decline even further in the next 12 months, according to PwC’s 15th Annual Global CEO Survey.  Just 15% said the global economy will improve during 2012. However, nearly three times as many CEOs are confident in their own companies’ growth prospects for the next 12 months than in the outlook for the global economy, suggesting CEOs believe they have learned how to manage through difficult and volatile economic times.

40% of CEOs said they are ‘very confident’ of revenue growth for their companies in the next 12 months, down from the 48% last year - though still up from the 31% who were ‘very confident’ in 2010. Unsurprisingly, the biggest decline in confidence was in Western Europe. Beset by the sovereign debt crisis, just a quarter of European CEOs said they were very confident of revenue growth, down sharply from nearly 40% last year. Short term confidence also fell among CEOs in Asia Pacific, where confidence among CEOs fell to 42% from 54% last year. China saw the biggest decline in confidence in the Asia Pacific region, with 51% of CEOs feeling ‘very confident’, down from 72% last year.

"CEO confidence is decidedly down as they deal with the aftershocks to the recession. CEOs are disappointed with the course of the global economy and the pace of recovery. The optimism that had been building cautiously since 2008 has begun to recede," said Chin Kwai Fatt, Managing Director, PwC Malaysia.

“Nonetheless, despite the uncertainties, the long-term trends that have encouraged corporations to invest in the emerging world, create innovation and develop talent remain firmly in place,” explained Chin.


The Talent Challenge

Finding and keeping the right talent remains a top concern for CEOs. Only 30% said they are ‘very confident’ they will have access to the talent needed to execute their company's strategy, and 43% believe that it has become more difficult to hire workers in their industry. Recruiting and retaining high potential middle managers is the biggest talent challenge, CEOs said, followed by hiring skilled production employees and younger workers.

This challenge cuts across all industries, even those with different talent needs, such as industrial manufacturing and pharmaceuticals.

“Many Malaysian CEOs will understand and indentify with this situation. Talent challenges have been at the top of our agenda for quite awhile now. The struggle to retain our best and brightest remains an uphill battle,” said Chin.

“One way to meet this challenge head on is to devote more energy and resources to develop a leadership and talent pipeline. Nearly three quarters (66%) of CEOs surveyed globally say they plan to do this. They expect to make changes to their strategies for managing talent in the next twelve months,” he continued.

Not having the right talent in place is a leading threat to growth for many CEOs. In fact:

  • One in four CEOS said they were unable to pursue a market opportunity or have had to cancel or delay a strategic initiative because of talent constraints
  • More are now integrating human resource with business planning at the highest level of the company. 79% of CEOs say that the chief human resource officer (or the equivalent) is one of their direct reports.
  • Two thirds say that it’s more likely that talent will come from promotions within their companies over the next three years.
  • Recruiting and retaining high potential middle managers is the biggest concern for CEOs.

Growth opportunities

According to the CEOs:

  • Nearly one third of respondents said the best strategic growth opportunities in the next 12 months will come from increasing share in existing markets and from developing new products and services, both cited by nearly one third of respondents.
  • The emerging markets remain a vital growth opportunity for CEOs. Overall, 59% agreed that growing markets were more important to their company's future than more developed economies.
  • Almost half of CEOs from developed nations said that emerging markets were most important to their future.
  • Seventy percent of CEOs plan to make changes to their strategy in the next 12 months, driven primarily by customer demand and economic conditions. Cost reduction remains a key, though declining, focus for CEOs; 76% reported they cut costs in the last 12 months, down from 84% the previous year.  And 66% of CEOs said they would cut costs in the next 12 months.
  • They’re adapting the way they go to market, reconfiguring processes and at times entire operating models. Between 17% and 36% of CEOs expect to either modify or create products for specific markets to suit local customer preferences. 



Notes to editor:

  1. For PwC's 15th Annual Global CEO Survey, 1,258 interviews were conducted in 60 countries in the last quarter of 2011. 291 interviews were conducted in Western Europe, 440 in Asia Pacific, 150 in Latin America, 236 in North America, 88 in Central and Eastern Europe, and 53 in the Middle East & Africa.
  2. 38 in-depth CEO interviews were also conducted. Datuk Rohana Rozhan, CEO, ASTRO Malaysia Holdings, was one of the in-depth interview respondents
  3. PwC's 15th Global CEO Survey was launched at a press conference in Davos on the eve of the World Economic Forum's Annual Meeting.
  4. The full survey report with supporting graphics can be downloaded at
    To download broadcast-quality clips from the press conference and other supporting footage, visit
  5. To watch the full webcast of the press conference, visit A recorded version will also be available at the same address.

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