DGAP-News: PwC /
CEOs' Confidence Rises for 2014

21.01.2014 / 20:33


Twice as Many Say Global Economy to Improve; 39% Strongly Predict Company Growth

  Worries about over-regulation, fiscal deficits, tax policy higher than ever

            Half of CEOs plan to increase the size of their workforce

DAVOS, Switzerland, Jan. 21, 2014 (GLOBE NEWSWIRE) -- Twice as many CEOs around
the world as last year believe the global economy will improve in the next 12
months, and 39% say they are 'very confident' their company's revenues will
grow in 2014, according to PwC's 17th Annual Global CEO Survey. 

Global economy

The number of CEOs who see improvement in the global economy over the next 12
months leapt to 44%, up from only 18% last year. And just 7% predict the global
economy will decline, sharply down from 28% in 2013. 

Regionally, CEOs in Western Europe are the most confident about short-term
global economic prospects (50%), in line with signs of improving conditions.
They are followed by those in the Middle East (49%), Asia Pacific (45%), Latin
America (41%), North America (41%) and Africa (40%). CEOs in Central and
Eastern Europe show the lowest level of confidence at 26%. 

By industry, CEOs in the Hospitality and Leisure sector are most confident
about prospects for the next 12 months (46%), followed by those in Banking and
Capital Markets (45%), Retail (44%), Financial Services (44%), Asset Management
(44%), Communications (44%), and Engineering & Construction (41%). CEOs in the
Metals industry are least confident at 19%. 

Revenue growth

For their own companies, 39% of CEOs say they are 'very confident' of revenue
growth prospects for the next 12 months. That's up from 36% last year.
Confidence in revenue growth reached a low of 21% in 2009. 

CEOs in the Middle East, 69%, are the most confident of short term revenue
growth, up from 53% last year. They are followed by those in Asia Pacific at
45%, up from 36% last year. 

In Western Europe, confidence has risen 8% from last year's trough to reach
30%. But in Africa confidence has continued to fall. Just 40% of African CEOs
are very confident of 12-month growth, down from 44% last year and 57% in 2012.
Confidence has also dipped among Latin American CEOs, to 43%, down from 53%
last year. Meanwhile, CEO confidence in North America remains flat at 33%. 

At an individual country level, confidence varies very widely: the highest
levels of CEO confidence are found in Russia, where 53% of CEOs are very
confident of revenue growth, followed by Mexico (51%) and Korea 50%. Korea has
had a huge swing in confidence up from only 6% last year. They are followed by
India (49%), China (48%), Switzerland (42%), Brazil (42%), US (36%), Germany
(33%), UK (27%), Canada (27%), Japan (27%), Italy (27%), France (22%) and,
finally Argentina where only 10% of CEOs are very confident of revenue growth
in 2014. (see note 2) 


Commenting on the survey results, released at the opening of the World Economic
Forum's annual meeting in Davos, Switzerland, Dennis M. Nally, Chairman of
PricewaterhouseCoopers International, said: 

'CEOs have begun to regain confidence. They've successfully guided their
companies through recession and now more CEOs feel positive about their ability
to increase their revenues and prospects for the global economy. However, CEOs
also acknowledge that generating sustained growth in the post-crisis economy
remains a challenge, especially as they deal with changing conditions like
slowing growth in the emerging markets. 

'And worries continue to loom large on CEO horizons with CEOs sending a clear
message to government with their levels of concerns about over-regulation,
fiscal deficits and tax burdens at their highest levels. 

'For the future, CEOs tell us that they expect three major global trends -
rapid technological advances, demographic changes and shifts in economic power
- will have a major impact on the future of their businesses. Finding ways of
turning these global trends to their advantage will be the key to future


CEO top concerns

As CEOs' viewpoint on the economy slants upward, their major concerns have also
changed. Government action, or the lack of it, tops the list of CEO worries.
The level of concern about over-regulation at 72% and fiscal deficits at 71%
are as high as they have ever been. Countries where CEOs are particularly
worried about over regulation include France 88%, Australia 85%, India 82% and
Germany 77%. In the US it is fiscal deficits that have CEOs most worried with
92% CEOs expressing concern, followed by Argentina at 90% and France at 84%. 

In addition, CEOs say they are worried almost as much about a slowdown in
emerging economies, 65%, as they are about sluggish growth in developed
markets, 71%. Other top concerns include increasing tax burdens (70%), as well
as availability of key skills (63%), exchange rate volatility (60%) and lack of
stability in capital markets (59%). 

But such topical subjects as cyber threats - including lack of data security -
and the speed of disruptive technological change are named as threats by less
than half of CEOs. 

Talking in more detail about regulation, nearly 80% of CEOs say it has
increased costs, while 52% say that regulation makes it more difficult to
attract skilled workers. And 40% say regulation has inhibited their efforts to
pursue a new market opportunity or to pursue innovation. On the positive side,
over half of CEOs credit regulation for helping to improve service delivery and
quality standards. 

Preparing for the future

When asked what would drive future growth, new product or service development
leads the list of opportunities, cited by 35% of CEOs compared with 25% last
year. Those planning mergers and acquisitions or strategic alliances in the
next year have risen to 20%, up from 17% a year ago. CEOs also say they are
exploring growth in countries beyond the BRICs (Brazil, Russia, India and
China), and see good growth prospects over the next three to five years in
Indonesia, Mexico, Turkey, Thailand and Vietnam. The US, Germany and the UK are
also ranked highly. 

CEOs are also more positive about hiring plans for the coming year. Half of
CEOs say they expect to add to staff in the next 12 months, compared with 45%
who had such plans last year. Industries where job prospects look most positive
are technology (63%), business services (62%) and asset management (58%) (see
note 3). 

As the global economy stabilises, CEOs have identified major trends that will
transform their business over the next five years. Top among them is
technological advance, cited by 81% of CEOs, followed by demographic shifts,
60%, and shifts in global economic power, 59%. 

To meet these and other challenges, CEOs say they are making changes to their
talent strategies (93%), customer growth and retention strategies (91%),
technology investments (90%), organisational structure/design (89%) and use and
management of data (88%). 

More than half of CEOs say their current planning time horizon is three years,
though only 40% say that time frame is ideal. 

Dealing with Governments

Asked to rank the top priorities for government, CEOs say they should be to
ensure financial stability, (53%) improve infrastructure (50%); and help to
create a more internationally competitive and efficient tax system (50%). But
less than half (46%) of CEOs say the government in their home country has
effectively ensured financial stability, and just 37% give high marks for
improved infrastructure. More than half (51%) of CEOs say their government has
been ineffective in improving the tax system. 

Paying Taxes

The international tax system has fallen short in the eyes of CEOs around the
world, the survey finds. Nearly two-thirds of CEOs say the international tax
system is in need of overhaul. Notably, 75% of CEOs say that being seen as
paying a 'fair share' of tax is important to their company. 

Most CEOs say tax policies and competitiveness of tax regimes are key factors
in corporate decision making, and agree that multinational companies should be
required to report revenues, profits and taxes paid for each country in which
they operate. They also agree tax authorities around the world should freely
share information about companies. 

But only a quarter of CEOs say current OECD attempts to reform the
international tax system will be successful in the next few years, while 40%
say efforts will not reach consensus. 

Stakeholder expectations and trust

CEOs worldwide report that stakeholder expectations in their industry have
changed significantly in the past five years: 52% say the level of trust among
customers and clients has increased, compared with 12% who say it has declined.
While 43% say trust has improved among creditors and investors, 16% say it has
declined. Finally, 42% say trust among suppliers has improved, while only 6%
say it has fallen. 

But while 24% of CEOs have seen improved trust among government and regulators,
34% say it has declined. 

The great majority of CEOs say it is important for companies to address
stakeholders' expectations by promoting ethical behaviour, ensuring the
integrity of supply chains and improving diversity. 

Notes to editors:

1.  Survey Methodology:

For PwC's 17th Annual Global CEO Survey, 1,344 interviews were conducted in 68
countries during the last quarter of 2013. By region, 445 interviews were
conducted in Asia Pacific, 442 in Europe, 212 in North America, 165 in Latin
America, 45 in Africa and 35 in the Middle East. 

The full survey report with supporting graphics and broadcast quality footage
can be downloaded at press.pwc.com. Video clips from the CEO survey press
launch in Davos will also be available after the event. 

2.  List of country/regional CEOs saying they are very confident of 12 month

Very confident of short-term revenue growth
                          2014       2013  
Russia                    53%        66%   
Mexico                    51%        62%   
Korea                     50%        6%    
India                     49%        63%   
China/Hong Kong           48%        40%   
ASEAN                     45%        40%   
Denmark                   44%        NA    
Switzerland               42%        18%   
Brazil                    42%        44%   
Global                    39%        36%   
Romania                   39%        42%   
US                        36%        30%   
Australia                 34%        30%   
Germany                   33%        31%   
Scandinavia               30%        20%   
UK                        27%        22%   
Canada                    27%        42%   
Japan                     27%        18%   
Italy                     27%        21%   
Venezuela                 25%        30%   
South Africa              25%        45%   
Spain                     23%        20%   
France                    22%        13%   
Argentina                 10%        26%   

3.  List of CEOs planning job increases by industry.

   Percentage of CEOs expected to boost headcount  
          in next 12 months (by industry)          
                                         2014  2013
Technology                                63%   44%
Business services                         62%   56%
Insurance                                 59%   39%
Asset Management                          58%   55%
Energy                                    56%   39%
Entertainment & Media                     53%   43%
Healthcare                                53%   43%
Banking & Capital Markets                 52%   44%
Communications                            52%   36%
Engineering & Construction                51%   52%
Hospitality & Leisure                     51%   33%
Retail                                    51%   49%
Chemicals                                 49%   43%
Consumer Goods                            46%   40%
Consumer & Industrial Products Services   46%   N/A
Industrial Manufacturing                  46%   36%
Automotive                                45%   44%
Forest, Paper & Packaging                 45%   32%
Pharmaceuticals & Life Sciences           44%   38%
Transport & Logistics                     40%   43%
Power & Utilities                         36%   41%
Mining                                    25%   39%
Metals                                    22%   28%

4.  PwC helps organisations and individuals create the value they're looking
for. We're a network of firms in 157 countries with over 184,000 people who are
committed to delivering quality in assurance, tax and advisory services. Tell
us what matters to you and find out more by visiting us at www.pwc.com. 

(c)2014 PwC. All rights reserved

PwC refers to the PwC network and/or one or more of its member firms, each of
which is a separate legal entity. Please see www.pwc.com/structure for further

The PwC logo is available at

CONTACT: Mike Ascolese, PwCTel: Tel: +1 (646) 471 8106e-mail:
mike.ascolese@us.pwc.comMike Davies, PwC(On site at Davos) Tel: +44 (0) 78 0397
4136e-mail: mike.davies@uk.pwc.comFor more details, go to press.pwc.comFollow
us on Twitter: @Dennis_Nally, @pwc_press
News Source: NASDAQ OMX

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Language:    English        
Company:     PwC            
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