CEOs in Asia Pacific say prospects gloomy for global economy

Confidence in revenue growth remains strong, though interrupted

Bangkok – 15 March 2012 - Nearly half (48%) of the 1258 CEOs polled worldwide believe the global economy will decline even further in the next 12 months, while the sovereign debt crisis in Europe and the state of the overall global economy are putting a dent in the confidence level of CEOs in Asia Pacific, 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.

"CEO confidence is decidedly down as they deal with the aftershocks to the recession. They’re 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," says Dennis M. Nally, PwC International Chairman. “The ongoing debt crisis in the EU, along with other lingering economic uncertainties, has deflated confidence in business growth around the world. Even the fast growing economies of Asia and Latin America are not immune to the realities of continued economic stagnation, belying the notion that the global economy has decoupled. CEOs all around the world are concerned about the health of the global economy,” adds Mr Nally.

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.

The survey results, based on interviews with 1258 CEOs from 60 countries, were released at the World Economic Forum annual meeting in Davos, Switzerland.

Looking at what is worrying CEOs, 80% of CEOs had some concern about uncertain economic growth, 64% about instability in the capital markets, 66% about government responses to fiscal deficits and debt burden, 58% about exchange rate volatility and 56% about over regulation. And while 56% of CEOs said their company had been financially affected by the sovereign debt crisis in Europe; 45% said they had taken steps to respond.

CEOs in Asia Pacific revolve around the direction of the world economy. 83% of the CEOs in Asia say they’re concerned about the uncertain or volatile economic growth to their business prospects. Exchange rate volatility and instability in the capital markets also top the worries of most CEOs. Compared to their global counterparts (42%), chief executives in the region (57%) are significantly more concerned about inflationary pressures.

"The good news is that the long cycle of the slowdown has taught CEOs how to manage their businesses with ever greater efficiencies," Mr. Nally added. "CEOs now say they are better prepared to deal with an economy defined by volatility in global markets, weak demand in developed economies, and uncertainty in the emerging markets. Many CEOs are confident they can deliver revenue growth despite the difficult conditions."

Growth Opportunities

With Asia continuing to be a compelling growth story driven by strong fundamentals, it is no surprise the region continues to be firmly on the radar for CEOs globally. When asked which three economies are most important to their growth prospects, 30% rank China as their top growth area, followed by the US (22%) and Brazil (15%).

Almost half of CEOs from developed nations said that emerging markets were most important to their future. Top growth targets were the BRIC countries (Brazil, Russia, India and China), joined by the U.S. and Germany. In all, when asked to select the top three targets for growth, more than 60 different countries were named by CEOs.

“Many Asia economies have started to loosen their monetary policies. So long as the European debt crisis does not escalate into a full blown crisis, Asia should be able to make a strong contribution to the global economy” says Mr. Prasan Chuaphanich, Executive Chairman of PwC Thailand

 The Talent Challenge

Finding and keeping the right talent remains a top concern for CEOs in the region. Only 31% say they are ‘very confident’ they will have access to the talent needed to execute their company's strategy. Forty-three percent 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, 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.

"It's ironic that as the economy struggles, shortages of key personnel are having an impact on the way companies do business," says Mr. Prasan “CEOs say they are having difficulty finding and retaining skilled people in their industries and turnover in emerging markets is high. The problem is expected to become more acute as global demographic patterns change."

Despite the sluggish economy, businesses are gearing up to hire. Half of CEOs in Asia say they had increased headcount in their organisation in the past 12 months and about the same percentage expect the hiring momentum to continue. Just 15% expect to cut their workforce in the coming year, down from 20% who said they made cuts in the past 12 months.

With the threat of a potential derailment in the global economy, and a change in customer demand, CEOs have changed, or are changing, the way they conduct their business. Getting the right talent strategy in place and R&D and innovation are critical to compete in a world that continues to face unprecedented challenges.




You can download the full report on

Notes to editors

Survey Methodology:

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. The full survey report with supporting graphics can be downloaded at

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. To download broadcast-quality clips from the press conference and other supporting footage, visit To watch the full webcast of the press conference, visit


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