As the global economic downturn deepens, CEOs in Asia-Pacific remain more optimistic about short-term growth prospects compared with others around the world, a PricewaterhouseCoopers (PwC) survey found. And while downsizing is an option amid tough times, the poll suggests that many CEOs are still concerned about having enough talent for the long term.
Conducted among more than 1,100 CEOs across 50 countries during Q4 2008, PwC’s 12th Annual Global CEO Survey found that 31% of Asia Pacific head honchos were very confident of growing revenues in the next 12 months.
Globally, only 21% of CEOs expressed such optimism and this is the lowest level recorded in six years.
Reflecting the economic slowdown, confidence levels dropped from a year ago. In 2007, 56% of Asia-Pacific CEOs were upbeat about short-term growth prospects.
‘Uncertainty about the future is still running high and confidence no doubt continued to deteriorate after we completed the survey in early December,’ said PwC’s global CEO Samuel A DiPiazza Jr.
But even as tough conditions force corporate leaders to consider cost-cutting measures, talent management remains a priority for some. Almost all Asia-Pacific CEOs believe that attracting and retaining key talent is critical to long-term growth.
Sixty-one per cent of them also said that the limited supply of candidates with the right skills is a key challenge to success.
‘CEOs are balancing the need to reduce costs against programmes that support critical talent and improve productivity. Companies that achieve the right balance will be better placed for a return to growth,’ said executive chairman of PwC LLP (Singapore), Gautam Banerjee.
But for now, growth prospects have been dented. Almost 70% of Asia-Pacific CEOs said that investment plans would be affected by higher financing costs and tighter credit. Most also expect growth to be largely funded by internally-generated cash flows.
‘CEOs have had to contend with a lack of capital, tight credit conditions and uncertainty around company and asset valuations,’ said Mr Banerjee. As a result, ‘more CEOs may be choosing to enter collaborative arrangements such as joint ventures over M&As in order to spread the cost and risks associated with cross-border arrangements.’
According to the survey, 50% of Asia-Pacific CEOs felt that joint ventures and strategic alliances will play a greater role in business growth than cross-border M&As over the next three years.
Source – Business Times
