CEOs positive but need greater willingness to export
MIDLANDS-based CEOs have a positive outlook but they also need to be bold and avoid ‘sticking to markets they know’ at the expense of pursuing opportunities further afield, global analysts have said.
Analysis from PwC’s annual global CEO survey shows that 79% of UK CEOs are upbeat about revenue growth in the coming year, compared with 64% of CEOs in the Eurozone countries.
The firm said the positive outlook was an encouraging sign that the UK is faring better, in confidence terms, and almost half (46%) of the CEOs said they are ‘very confident’ of growth in the next three years.
However overall, UK business leaders say the outlook for global economic conditions remains challenging, with 89% of UK CEOs believing it will not improve, or decline further in 2012. Further cost reductions are anticipated, as UK CEOs focus on reinforcing and building share in existing markets rather than expanding into new ones.
Nationally, the survey found that less than a quarter of CEOs (22%) are looking for growth from new products or services, and only 18% from new geographic markets.
Mark Smith, senior partner at PwC in the Midlands, said: “Some business leaders in the region may be guilty of sticking with what they know, believing that their best chance for growth in the next 12 months will come from increasing their share in existing markets, rather than going for growth.
“Growth opportunities still exist, particularly in faster growing emerging market economies and where new technology is opening up possibilities. The challenge now is to ensure that the experience of slower growth in traditional markets and the uncertainty created by more volatility does not prevent them taking advantage of these areas of new opportunity.”
The majority (53%) of CEOs nationally plan to increase global headcount in the next 12 months, while 21% say they expect to cut their global workforce. PwC said it was encouraging to see that 85% of CEOs thought they had access to the talent needed to deliver their company’s strategy over three years.
The major concerns on the minds of UK CEOs include uncertain and volatile economic growth (86%), the Government’s response to the fiscal deficit (74%), lack of stability in capital markets (72%) and over regulation (60%).
Nationally, CEOs say that the majority of their key business outside the domestic market is in Western Europe, with 45% engaged in North America, 28% involved in the Middle East and 8% in Africa.
Although China is still perceived as an important territory for growth, this is at a lower level than in last year’s survey, with just 26% of CEOs saying they see the most important growth opportunities in China compared with 42% in 2011. Interest in Brazil has also dropped off from 15% to 5% in the 12 months, with interest in India at 12%.
