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Asian CEOs bet downturn is over

By Hu Yuanyuan (China Daily)
Updated: 2010-02-03 08:04

Asia-Pacific CEOs are more confident than they were last year about immediate and long-term economic growth, PricewaterhouseCoopers (PwC) said in its 13th annual global CEO survey yesterday.

Indicating that the worst of the global downturn is behind them, 82 percent of Asia-Pacific CEOs are confident revenues will rise during the next 12 months, in line with the global average of 81 percent.

This is in stark contrast with the results of the 2008 survey, where only 66 percent of Asia-Pacific CEOs expressed confidence in economic growth. Underpinning this optimism is a belief that Asia will be the center of economic expectation.

"The sense of optimism is especially keen in Asia, which will undoubtedly be a center of growth in the new world order. In order to capitalize on this, Asia-Pacific CEOs must remain focused on their long-term prospects despite the global changes and challenges that the downturn has brought," said PwC's Global International Chairman Dennis Nally.

There is increasing expectation that bank lending will play an important role in financing growth (45 percent), while internally generated cash flows remain the preferred method (78 percent), said the report.

Leadership and talent development is a key area (75 percent) in which Asia-Pacific CEOs will focus their long-term investment decisions. However, the financial downturn has also caused CEOs to be more prudent about their spending, with initiatives to realize cost efficiencies coming in highest (84 percent).

Despite the focus on cost savings, almost 50 percent of CEOs expect to increase staff numbers over the next 12 months, while only 16 percent expect to reduce their headcount.

"Talent remains a top priority for CEOs. The crisis taught us a few things - one of which is that organizations that are able to balance people retention and development against cost reduction measures will be well positioned for taking on the upswing. With Asia-Pacific poised to be an economic powerhouse, having the right people in place is more urgent than ever," said Frank Lyn, China Markets Leader of PwC.

As a result, Asia-Pacific CEOs expect to invest significantly in employee growth, and not just through compensation alone. Almost half will alter their training and development programs to prepare their people for the upswing.

The crisis has also reminded CEOs of the importance of engaging their people - 43 percent will concentrate on staff morale and employee engagement programs. Only 16 percent of CEOs expect to make any adjustments to remuneration levels.