VOL. 129 | NO. 14 | Wednesday, January 22, 2014
Survey Finds CEOs More Confident on Global Economy
JOHN HEILPRIN & PAN PYLAS | Associated Press
DAVOS, Switzerland (AP) – With the worst of the global financial crisis behind them, CEOs are ready to move on from the fight for survival their businesses have been in for the past few years, a survey found Tuesday.
Accounting and consulting firm PricewaterhouseCoopers, which conducted the survey, said the world's corporate leaders are "gradually switching from survival mode to growth mode." That could lead to more investment, growth and jobs.
For activists, however, the concern is to make sure any gains are distributed more evenly: the growing concentration of wealth in the hands of a super-elite has, they say, fueled global inequality and eroded trust in political institutions and businesses.
PwC's findings came as political and business leaders gathered in the Swiss ski resort of Davos. In its annual report at the start of the World Economic Forum, it found the mindset of CEOs has "less to do with sheltering from economic headwinds and more to do with preparing for the future."
Despite that improvement in sentiment, PwC said further gains may prove more difficult. Generating growth is "getting increasingly complicated" as the global economy finds its footing following years of crisis that have left their mark in the way business is conducted across all sorts of sectors.
In an interview with The Associated Press, PwC Chairman Dennis M. Nally said the next big challenge will be the cost and complexity of dealing with a thicket of new regulations that have sprung up since the financial crisis exploded in 2008 and sent the world skidding to its deepest recession since World War II.
"Whenever you have an event like the financial crisis that we have just been through, you always see this pendulum move one way, and it is going to take some time to bring it back into balance," Nally said. "It's not as if there's clear sailing for the foreseeable future."
Over the past few years, many businesses battened down the hatches to survive. They cut costs, resulting in the loss of millions of jobs around the world, and put on hold acquisitions and other potentially risky investments.
But the survey suggests that a turnaround – albeit a modest one – is on the cards. Confidence is rising in the advanced economies such as United States, Britain and Germany, though Nally said the global recovery would be held in check by a slowdown in emerging economies. The more optimistic prognosis came as the International Monetary Fund raised its growth forecast for the world economy.
Among the key outstanding problems, Nally cited a lack of public trust in institutions, along with "a huge lack of trust between government and business" that will take some time to restore.
Pope Francis urged leaders to "use their innovation, ingenuity and professional expertise to improve the lives of those still living in poverty." In a message read by Cardinal Peter Turkson, President of the Pontifical Council for Justice and Peace, he emphasized the responsibility of political and economic leaders towards "the frail, weak and vulnerable."
His message came amid concern of a growing gap between the rich and poor and the high number of people, particularly the young, looking for work and unable to find any – a development that could spark widespread social unrest.
Winnie Byanyima, the executive director of Oxfam International, says there's a risk when the 85 richest people on the planet – a group that could fit comfortably in a double-decker bus – possess a wealth comparable to the total assets of half its 7 billion or so inhabitants.
"For wealthy companies, they need to step up in leadership and refrain from using their financial power to rig the political process, to highjack democracies," she said.
The PwC survey results were based on interviews with 1,344 CEOs in 68 countries between Sept. 9 and Dec. 6, 2013.
Ivana Bzganovic contributed to this report.
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