Corporate leaders gather in Davos

Wed, Jan 23, 2013, 00:00

Global chief executives are more pessimistic about company growth prospects than a year ago and more optimistic that the global economy won’t shrink in 2013, according to a survey by PricewaterhouseCoopers.

Fifty-two per cent of 1,330 chief executives surveyed predict the global economy won’t worsen this year and 18 per cent expect it to improve.

At the same time, only 36 per cent are “very confident” about their company’s growth prospects, with executives citing concerns from fiscal deficits to financial market volatility that could crimp revenue.

The survey was released as corporate leaders, including Muhtar Kent of Coca-Cola and Andrew Liveris of Dow Chemical gather in the Swiss resort of Davos for the World Economic Forum’s annual meetings.

While Europe remains mired in a recession, business confidence has increased since last year as the effect of measures by the European Central Bank to tame the sovereign-debt crisis take root.

“CEOs remain cautious about their short-term prospects and the outlook for the global economy,” Dennis Nally, chairman of PwC International, said in a statement.

More than four-fifths of business leaders said their top concern was uncertain economic growth, with the state of government finances and over-regulation following closely. Sixty-one per cent said capital-market volatility may hurt company growth. Further ahead, 46 per cent of chief executives said they are very confident about the growth outlook in the next three years, although prospects differed according to region. While most business leaders in Africa and the Middle East said they are very confident of growth over that period, only 34 per cent of western European business leaders said the same.

On recruitment, 45 per cent of chief executives said they plan to add jobs this year, down from 51 per cent in 2012. Twenty-three percent intend to reduce the size of the workforce, according to the survey. – Bloomberg