UK CEOs less confident of growth this year than many global counterparts
MIDLANDS-based CEOs are remaining resilient in the face of continuing economic uncertainty but are at risk of staying within their domestic ‘comfort zone’ rather than pursuing opportunities further afield, a new report has claimed.
Analysis from PwC’s annual global CEO survey concluded that, against the background of an uncertain and volatile global economy, around a third of UK CEOs are ‘very confident’ about revenue growth in the next three years.
Growth prospects for the next 12 months, however, were less optimistic (22%) – in sharp contrast to CEOs elsewhere in the world.
CEOs in Russia are three times (66%) more confident of growth over the next 12 months than their UK counterparts, followed by those in India (63%) and then Mexico (62%), Middle East (53%), Africa (52%), South Africa (45%), Brazil (44%), Canada (42%), Romania (42%), ASEAN (40%), China/Hong Kong (40%), Germany (31%), Australia (30%), US (30%), Venezuela (30%), Argentina (26%), Italy (21%), Scandinavia (20%), Spain (20%), Japan (18%), Switzerland (18%), France (13%) and finally, Korea (6%).
In the year ahead UK CEOs intend to focus on cutting costs (83%), prioritising investments that will grow their customer base (62%), improving operational effectiveness (54%), enhancing customer service (52%) and engaging in new M&A/joint ventures/strategic alliances (40%).
Opportunities for growth are much closer to home than perhaps anticipated. Over a third (38%) of UK CEOs are expecting organic growth in domestic markets to be their key opportunity for growth, with 24% citing new products or services.
Only 14% of UK CEOs are targeting organic growth in an existing foreign market (compared to 36% of German and 37% of French CEOs).
Mark Smith, regional chairman at PwC in the Midlands, said: “As Midlands businesses ride out the current uncertain period, in which ‘more of the same’ is the expectation of many economists, the question is whether business leaders are seizing opportunities for growth beyond their domestic marketplace. While some businesses in the region are leading the way, others may be sticking to their domestic ‘comfort zone.’
“Whilst it is important not to ignore growth prospects at home, growth opportunities still exist abroad, especially in the US and BRIC economies where GDP growth is higher than here. Business leaders must be encouraged to keep a long-term view and capitalise on opportunities to infiltrate new markets.”
The majority of UK CEOs perceived a key threat to their business coming from insufficient access to the skilled workforce they need, and when asked what should be the government’s priorities for business, four out of five said creating and fostering a skilled workforce.
They also claim they are prepared to pay for the right skills, with two-thirds planning to increase investment in building a skilled workforce over the next 12 months, and 40% saying they will increase headcount next year.
