Renewed confidence was spread across all continents, with CEOs in India, Austria, Colombia, Peru, China, Thailand and Paraguay particularly upbeat about near term growth. Regionally, CEOs in Western Europe were the least confident. German CEOs were an exception, with nearly 80% of CEOs "very confident," up from about 20% last year. The survey results were released at the World Economic Forum annual meeting in Davos.
CEOs said they considered China the most important country for future growth. China was named by 39% of CEOs, followed by the US, 21%; Brazil, 19%; and India, 18%. And China, the US and India were seen as the most important future sources for products and raw materials. Regionally, 90% of CEOs said they expect their operations to grow in Asia in the next 12 months, followed by Latin America, 84%; Africa, 75%; the Middle East, 72%; and Eastern Europe, 70%. But just a third of respondents said the country in which they are based offers high growth potential.
Strategically, the best opportunities for growth in the next 12 months will come from the development of new products and services and from increasing share in existing markets, both cited by 29% of CEOs. New market penetration, at 17%; mergers and acquisitions, 14%; and new joint ventures and alliances, 10%, trailed as leading growth strategies.
"CEOs have emerged from the bunker mentality of surviving the recession. They now see renewed opportunity for growth, even in the near term, and are determined to take advantage of better global economic conditions and increased customer demands," said Dennis M. Nally, Chairman of PricewaterhouseCoopers International.
"The post-recession global economy is recovering on two-tiers. Emerging economies like China, India and Brazil are growing at rates that far surpass the developed nations. The shift in the economic balance of power creates challenges for CEOs in deciding how and where to invest in facilities, people and innovation. Companies that understand and capitalize on the diverging growth patterns of the developed and emerging economies will be the winners in the years ahead," he added.
The positive momentum in CEO confidence was reflected in hiring plans; more than half (51%) of CEOs worldwide said they expected to add jobs in the next 12 months, up from 39% in the last survey. CEOs in Central Europe, Asia Pacific and Africa were particularly bullish about hiring. Significantly, just 16% of CEOs said they expected to cut their workforce in the coming year, down from 25% last year.
The impact of the recession on strategy was also evident in the survey results. Most CEOs – 84% – said they had changed their company's strategy in the past two years, and about a third said the change was fundamental. Strategic changes were driven primarily by economic uncertainty, customer requirements, and the post-recession dynamics in their industry. Most CEOs said they plan to change their strategies for managing talent (83%), risk (77%), investments (76%), and organisational structure (74%).
Fewer CEOs, 64%, said they planned to cut costs in the next 12 months, down from about 70% last year. And 34% said they would complete a merger or acquisition, half expect to form a new strategic alliance or joint venture, and 31% said they would outsource a business function. Western Europe, Asia and North America were the most popular venues for M&A.
