DAVOS, Switzerland (Reuters) - A rise in CEO confidence is driven by a belief that revenues will increase over the next 12 months, despite economic and geopolitical headwinds, a survey by PricewaterhouseCoopers said.
PwC’s annual survey of 1400 CEOs coincides with the start of the World Economic Forum in Davos, where PwC’s Global Chairman Bob Moritz told the Reuters Global Markets Forum that the rising cost of compliance and regulation was also a major concern.
Here are excerpts from the conversation:
Question: What do you think is the biggest fear among CEOs, could it be the failure to see a new technology catch them on their blind side?
Answer: The top three are economic uncertainty, so we live in a more fragile, volatile environment. Secondly, increasing cost of compliance and regulation and thirdly, availability to attract the right resources. Technology is seen as an asset if used the right way with the right human skills - creativity and innovation, or a negative - the threat of disruption, cyber, social media implications.
Q: And where are CEOs looking to for growth this year?
A: The CEOs believe they will find growth through more organic activity but will look for M&A for new markets, skills, IP and talent. CEOs were asked what countries they will invest in over the next year and the U.S. was number one...with China being number two. It shows that CEOs will invest over the longer term in countries where underlying trends are sustainable, like the growth of consumer needs, stability and the rule of law, etc.
Q: Your survey showed CEOs feel globalization has done little to solve income inequality. Did you get a sense of what has gone wrong and is there any motivation to change that situation?
A: There are two major factors that come through - the impact from globalization and the impact from technology on job displacement. The latter point actually has had a bigger impact on job displacement or creation. So both governments and businesses need to ensure that their countries have the right skills and training for the future workforce and the changes that are coming. The CEO Survey shows that 52 percent of the CEOs are going to hire more this year but they are looking for different skills.
Q: I found it interesting that the UK was one of the countries with the most ambitious hiring plans for the next year. This is something else that doesn’t seem to fit in with the Brexit “economic meltdown” scenario portrayed last summer.
A: The concerns around Brexit are more medium- to longer-term. So the UK’s confidence is high, due to consumer demand and the implications of FX causing a rise in manufacturing, so over the short-term the confidence of the CEOs in the UK is higher and the willingness of CEOs outside the UK willing to invest in the UK is higher than most would expect.”
(This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on the Eikon platform. For more information on the forum or to join the conversation, follow this link: here)
Editing by Alexander Smith