PwC CEO Confidence Survey Shows All-Time Low Confidence

PricewaterhouseCoopers’s recently published 12th annual CEO survey tells us nearly what every other survey indicates. Echoing the pessimism which Deloitte found in January 2009 in global CFOs, this shows that CEO confidence is at an all-time low. Globally, only 21% of CEOs seem to be very confident on any revenue growth at all in the next 12 months. This is spectacularly down from a reading of 50% in last year's Global Annual Survey.

This pessimism is not isolated to one area, it seeps across all geographies, business sectors and levels of economic development. 7 of 10 CEOs indicate their companies will be affected by the credit crisis, and of this bunch, 80% will face higher financing costs, and 70% will postpone capex. The banking, utilities, construction, entertainment and automotive sectors are to be affected the most.

On the positive side, only 15% of North America and 15% Western Europe CEOs are even somewhat confident of the future. The picture is slightly better in emerging economies: 21% in Central and Eastern Europe, 31% in Asia Pacific, and 21% in Latin America remain optimistic. Most see only a rough slow road ahead.

What do CEOs want most at this time?

They want leadership and consistency from government, clear action, consistent policies and convergence of global tax and regulatory frameworks. But they are afraid of regulatory overreach, which could impede growth. CEO are more optimistic of cross-border JVs rather than M&A to drive sustainable growth. Energy costs and staff talent remain long-term challenges, with 80% CEOs reducing energy costs through efficiencies and alternative sources of energy; and 70% bemoaning shortage of qualified candidates.
Finally, better information is needed immediately to manage increasing and complex global risks.

CEOs are by nature optimists and continuous sellers of a bright future, so this level of pessimism does reflect a very tough global environment. There is some level of sobriety that has crept in due to the sudden, unanticipated and broad impact of the global credit crisis and ensuing recession in every part of the globe.

Big4 firm surveys of key business leaders, CEOs and CFOs are important since they cover a large section of global industry, and such surveys may prove to be key sentiment indicators on how long our tough environment will last, or things will change for the better in key decision makers.