Company heads think business won’t pick up for three years and have shifted their focus from growth to survival, according to a CEO survey that indicated how badly the global financial crisis has eroded confidence among industry leaders worldwide.
Less than a quarter of CEOs questioned in an annual PricewaterhouseCoopers survey for the World Economic Forum had hope for revenue growth over the next 12 months — a plunge from 50 percent a year ago, a time when fears of a downturn were already undercutting expectations.
The survey of 1,124 CEOs in 50 countries, conducted mostly by telephone, was released yesterday ahead of the forum’s annual meeting in Davos, Switzerland, where business and government leaders were gathering to take stock of a catastrophic year for world finances and talk about a “post-crisis world.”
“CEOs are most concerned about the immediate survival of their companies,” said Samuel DiPiazza, the global CEO of New York-based consulting firm PricewaterhouseCoopers.
Even once rapidly growing emerging economies are struggling to get credit and facing collapsing demand, the survey found.
The CEOs are not just worried about this year. Just 34 percent expressed confidence that they would see any revenue growth over the next three years, the survey said.
Chief executives are most worried about the impact of the recession on major economies, the survey found. They are also unsettled by volatile capital markets — and afraid of over-regulation.
The question of how much governments should be doing to stabilize markets is central to this year’s forum. The survey found a majority of CEOs favoring more collaboration between businesses and government.
Despite the somber outlook, most said they planned to keep staffing levels or continue hiring, with 26 percent saying they planned to reduce their work forces in the coming year.
The survey found pessimism across “all geographic regions, business sectors and levels of economic development.” Confidence was somewhat lower in North America and Western Europe than in Asia.
Indian CEOs were the exceptions, with 70 percent predicting growth in the next 12 months.
Russia and China showed dramatic drops in confidence from a year ago, when both saw 73 percent of CEOs forecasting growth in the coming year. This time, just 30 percent of Russian CEOs and 29 percent of Chinese chief executives expect such growth.
As the survey was being conducted, over the fourth quarter of last year, questioners found confidence worsening amid snowballing bad news.
“The speed and intensity of the recession has rocked the psyches of CEOs and created a global crisis of confidence,” DiPiazza said.
Almost 70 percent expect to suffer from the credit crisis, including higher financing costs and delays to planned investment. They predict more joint ventures and fewer mergers and acquisitions, which the surveyors attributed to lower cost and risks of joint ventures. Merger and acquisition activity was down last year, with only 20 percent saying they had completed one last year — below the 31 percent that CEOs had predicted a year ago.