CEOs of Indian companies have emerged as the most optimistic lot in the world when it comes to expectations for improvement in global economy this year and revenue prospects of their own businesses in the longer term.
However, the the 16th Annual Global CEO survey by PricewaterhouseCoopers’ (PwC) has identified Indian market as “decelerating” in comparison with Brazil, Indonesia and South Africa that are seen as “accelerating” growth markets.
The high confidence levels of Indian CEOs is in sharp contrast to the declining confidence level of CEOs across the world in their own businesses as well as for the broader economic scenario
The CEO confidence level is very high in India also in terms of hiring people for their companies, while the percentage of CEOs having overseen job cuts in their companies during the past year is the lowest in India, the survey said.
Announcing the results of its 16th annual CEO survey, which is released every year in this Swiss ski resort town during the WEF summit, PwC said that the CEOs are also getting about finding the right talent for their businesses, lack of stability in stock markets, the government response to fiscal deficit, as also growing regulatory and tax burden.
Globally, 36 percent of CEOs said they are ‘very confident’ of their company’s growth prospects in 2013. This is down from 40 percent last year and 48 percent in 2011.
About the overall economic scenario, 28 percent CEOs expect further downtrend in the global economy this year, while only 18 percent expected an improvement and more than 50 percent expected it to remain same. However, the confidence level has improved on this front, as 48 percent of CEOs expected a decline in global economy last year.
The survey results are quite different for India, where 90 percent CEOs said they are ‘somewhat or very confident’ of their own company’s revenue growth in the next 12 months.
Out of this, a massive 63 percent said they are very confident, making them the second-most optimistic lot on this front after Russian CEOs (66 percent). The confidence level of CEOs in India as well as Russia has gone higher on this front, from 55 percent and 48 percent respectively.
In the longer term, 97 percent of Indian CEOs were found to be ‘somewhat or very confident’ of revenue growth over the next three years, out of which 85 percent said they are very confident — making them the most optimistic in the world.
About global economy, 38 percent of Indian CEOs anticipate improvement in the global economy in 2013, which make them the most optimistic across the world.
However, global CEOs are not so gung-ho either about their own company’s growth or the growth potential of India.
Listing the countries about whose growth they are very confident, the CEOs from across the world listed China on the top, while India was at the fifth place ranked below the US, Brazil and Germany.
In longer term, the confidence level of CEOs from the across the world has remained stable and 46 percent of business heads globally said they are confident of growth prospects in the next three years.
Releasing the survey, PriceWaterhouseCoppers International Chairman Dennis M Nally said that CEOs from across the world are cautious about their short-term growth prospects and the outlook for the global economy.
He listed reasons like over-regulation, government debt and capital market instability for decline in the confidence levels of CEOs globally in the past year.
The biggest threats cited by Indian CEOs included protectionist tendencies of national governments, exchange rate volatility, government’s response to fiscal deficit and debt burden, and bribery and corruption.
For business threats, 81 percent cited availability of key skills, inadequate basic infrastructure and increasing tax burden.
Also, 92 percent of Indian CEOs said there was a need to increase capital investment in 2013, while 74 percent said they would increase headcount this year. Among Indian CEOs, only 9 percent plan to shed jobs, which is the lowest in the world. During the past year, 62 percent raised headcount and only 10 percent cut the jobs — which was again the lowest globally.
In terms of restructuring efforts, 60 percent of Indian CEOs said they implemented cost cutting measures in the past year and 53 percent plan to do so in 2013.
The Indian CEOs’ top target regions for M&As, joint ventures and strategic alliances during 2013 would be North America (44 percent), South Asia (22 percent), South East Asia (23 percent) and Central & East Europe or Central Asia (21 percent).