The 16th Annual Global CEO (chief executive officer) Survey by PricewaterhouseCoopers’ (PwC) has identified the growing Indian market as “decelerating” in comparison with Brazil, Indonesia and South Africa that are tagged as “accelerating” growth markets
Not only India, global CEOs have identified that markets such as China, Mexico, Russia, Saudi Arabia, South Korea and Turkey are also decelerating, according to the survey.
About 1,330 CEOs participated in the survey across 68 countries.
In terms of company growth prospects over the next one year, just 36 per cent of CEOs surveyed globally are “very confident”, posting a decline in confidence. In 2012, 40 per cent CEOs were very confident about the short-term growth prospects, while the number was much higher at 48 per cent in 2011. However, the situation is much better than that of 2009 (21 per cent) and 2010 (31 per cent).
CEOs have also expressed scepticism about the improvement of the global economy, with 28 per cent expecting a decline in 2013, showing better confidence level than that of 2012, when about 48 per cent CEOs worldwide predicted the decline of the global economy. About 52 per cent of the CEOs surveyed, however, expect there would not be any change in the global economic scenario.
“CEOs remain cautious about their short-term prospects and the outlook for the global economy. However, given the high levels of concern among CEOs about issues - such as over-regulation, government debt, capital market instability - it is no surprise that CEO confidence has declined in the last 12 months,” said Dennis M Nally, chairman of PwC International.
Interestingly, CEOs are most confident in Russia where 66 per cent are very confident of revenue growth in 2013, closely followed by India with 63 per cent vote, the survey has revealed.
Brazil, which has been identified as the second best “growing and accelerating” market (four per cent) just after Indonesia (6.2 per cent), lags behind when it comes to CEO confidence in revenue growth prospects over the next one year. Only 44 per cent CEOs in Brazil are very confident about near term growth prospects, followed by those in China (40 per cent) and Germany (31 per cent).
CEOs in Western Europe were least confident of short-term revenue growth. Faced with ongoing recession, only 22 per cent of western European CEOs said they were very confident of growth, down from 27 per cent last year and 39 per cent in 2011. Latin American CEOs, however, bucked the trend. Their short-term confidence rose to 53 per cent of CEOs, up slightly from last year. Confidence in short-term growth also declined in North America to 33 per cent (42 per cent in 2012) and in Asia Pacific to 36 per cent (42 per cent in 2012).
Interestingly, half of the top 10 countries identified as preferred business destination for the next 12 months are the growth markets. About 31 per cent of the CEOs worldwide have voted for China as the most preferred destination for business, followed by the US (23 per cent), Brazil (15 per cent), Germany (12 per cent) and India (10 per cent).
Dealing with disruption
Over the past decade, companies worldwide had to go through several disruptions both due to natural calamities and the likes of Lehman Brothers’ collapsing and the sovereign debt crisis in the Euro Zone. With this, ‘expect the unexpected’ has become the mantra for business leaders across the world.
To build organisations that can survive and thrive amidst disruptions, CEOs are pursuing three key strategies - targeting pockets of opportunity, concentrating on the customer and improving operational effectiveness, pointed out the PwC study.
About 68 per cent of CEOs are focusing on carefully selected initiatives - making a number of smart investments and consolidating their resources to maximise the odds of success.
On the deal side, just about 17 per cent of the CEOs surveyed are planning mergers and acquisitions eyeing primarily North America and Western Europe keeping in mind the advantage that they might get to bargain during the difficult times, stated the survey.
"We find CEOs working to deal with the ongoing risks. Strategically, CEOs continue to refine their operations, looking to cut costs without reducing value as they manage through sluggish times. They are seeking growth opportunities organically, avoiding large outlays that could strap resources for the future. They have a clear focus on customers, collaborating with them more closely than ever on programmes to stimulate demand, loyalty and joint innovation," Nally said.
