Company growth worries CEOs as economy gloom fades
Chief executive officers 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 percent of 1,330 CEOs surveyed predict the global economy won't worsen this year and 18 percent expect it to improve. At the same time, only 36 percent 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 CEOs including Muhtar A. Kent of Coca-Cola Co. and Andrew N. Liveris of Dow Chemical Co. 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 politicians and 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 M. Nally, chairman of PricewaterhouseCoopers International Ltd., said in a statement. "Leaders believe their organizations can be resilient by rolling with the short-term blows while reshaping for longer-term growth."
More than four-fifths of business leaders said their top concern is uncertain economic growth, with the state of government finances and over-regulation following closely. Sixty-one percent said capital-market volatility may hurt company growth.
Further ahead, 46 percent of CEOs 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 percent of Western European CEOs said the same.
On recruitment, 45 percent of CEOs said they plan to add jobs this year, down from 51 percent in 2012. Twenty-three percent intend to reduce the size of the workforce, according to the survey, with banking being the most likely industry for job losses.
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