Canadian CEOs more likely to say the economy is in recovery compared to their
global counterparts

About half of Canadian CEOs plan to increase workforce in 2010

TORONTO, Jan. 27 /CNW/ - With their worst fears of prolonged recession behind them, CEOs' confidence for future growth has bounced back from the gloomy prospects of a year ago, according to the 13th Annual Global CEO Survey by PricewaterhouseCoopers (PwC). Overall, CEOs in Canada tend to be more optimistic about their prospects for short- and long-term growth, and with respect to the recovery for their industry and their nation's economy, than their global counterparts.

    
    -   Eighty-one per cent of CEOs worldwide show some measure of confidence
        about their prospects for the next 12 months, while only 19% said
        they remained pessimistic. In Canada, the percentage is higher, with
        87% of CEOs confident about future prospects and 13% remaining
        pessimistic.
    -   Thirty-one per cent of CEOs globally said they are now "very
        confident" of their short-term prospects, compared to 36% of Canadian
        CEOs. The global percentage is up 10 percentage points from last
        year, which was a low point in CEO confidence since PwC began its
        tracking.
    -   Nearly 40% of CEOs globally expect to increase their staffing this
        year. This figure is higher in Canada, where about half of CEOs are
        expecting to hire.
    -   Canadian CEOs are more likely to say their industry's recovery is
        underway (38%) than their global counterparts (23%). When it comes to
        the economy, 26% of Canadian respondents said that recovery was
        already underway, compared to 13% of CEOs globally. Return to growth
        was fastest in China, where 67% of CEOs said recovery had begun in
        2009.
    

"The fears of a global economic meltdown have receded and CEOs are more upbeat about their prospects," said Chris Clark, CEO and senior partner of PwC Canada. "However CEO confidence is tempered by the slow pace of recovery and the fragile state of the economy. Canadian CEOs are more optimistic than their peers in other developed nations, as many of them managed through the recession while keeping an eye to the investments needed to sustain their organizations over the longer term."

This rising confidence has translated into a planned boost in recruitment, with nearly 40% of CEOs globally expecting to increase their staffing this year. In Canada and Asia Pacific, about half of CEOs are looking to increase employment in 2010, and this figure leaps to over 60% in Brazil. This contrasts with 25% of CEOs globally planning job cuts over the next year, down from nearly half who decreased headcount in the past 12 months.

Indeed, a strategy for managing talent is the top anticipated change Canadian CEOs plan to make to their organization's strategy or operating model (87% Canadian and 78% globally), compared to risk management which took on a greater importance among CEOs globally as a result of the recession. Eighty-five per cent of CEOs globally plan to make major changes to their company's approach to managing risk (79% in Canada).

"Talent management continues to be a recurring theme for Canadian CEOs," said Mr. Clark. "Businesses need to keep focused on their long-term people strategy as the economy recovers. Failure to do so could mean they do not have the right resources and skills for the upturn and lose competitive advantage."

The survey revealed striking differences in confidence levels, and by extension, the impact of the global recession, among CEOs in emerging economies and those in developed nations. In North America and Western Europe, for example, about 80% of CEOs said they were confident of growth in the next year. This compared with 91% in Latin America and China/Hong Kong, and 97% in India.

Looking at the longer term, the results were more even. Overall, 92% of CEOs globally expressed confidence in growth over the next three years (95% in Canada). Those results, coming at the start of a new decade, were about on par with confidence levels of CEOs in PwC's 2000 survey. But 10 years ago the economic split was very different, with far more optimism expressed by North American CEOs (42% - twice as many as in Asia).

For the future, a total of 60% of CEOs globally (59% in Canada) said they expect recovery in their national economies only in the second half of 2010 or later, while 13% said recovery was already underway (26% in Canada), and 21% said it would set in during the first half of this year (15% in Canada). However, nearly two-thirds of CEOs in the US and more than 70% in Western Europe said the turnaround would not begin until mid-2010.

The top opportunity for growth cited by Canadian CEOs was better penetration of existing markets (33% Canadian vs. 38% globally), followed by M&A (28% Canadian vs. 14% globally), and new geographic markets (15% Canadian and globally). Exchange rate volatility and the availability of key skills were reported as the top potential threats to business growth prospects, with 56% of Canadian CEOs reporting they are 'extremely' or 'somewhat concerned' about both.

"While CEOs in Canada were more prepared for the downturn than many, their biggest regret about how they dealt with the recession was not fully understanding the risks, and failing to respond more quickly," said Mr. Clark. "The importance of managing risk was the most often cited lesson to emerge from the financial crisis. CEOs are learning to balance risk management with decisiveness and flexibility as they seek to return to prosperity."

Other key findings of the 13th Annual PwC Global CEO Survey:

Fears for the future

Protracted global recession remains the biggest overall concern of CEOs around the world (65%) followed closely by fear of over-regulation (60%). In Canada, CEOs are less likely to be concerned about a longer global recession (51%) and are also less worried about over-regulation (41%). In contrast, more CEOs globally are "extremely concerned" about over-regulation (27%) than any other threat to business growth.

Combating the effects of recession

To combat recession, nearly 90% of all CEOs said their companies had initiated cost-cutting measures in the past 12 months (87% in Canada), led by those in the US, Western Europe and the UK. Nearly 80% globally and in Canada said they would seek cost cuts over the next three years.

Public trust and consumer behaviour

More than one in four CEOs globally believes their industry's reputation has been tarnished by the downturn (either a "significant fall" or "slight fall" in trust). This is compared to 23% of CEOs in Canada believing public trust has slightly fallen. None of the Canadian respondents stated there has been a significant fall in trust.

Nearly half of CEOs are concerned that the recession caused a permanent shift in consumer behaviour. Most say that consumers will place greater importance on a company's social and environmental reputation (77% Canadian vs. 64% globally), spend less and save more (79% Canadian and 63% globally), or be more active in product development (64% Canadian vs. 60% globally).

Climate change

More than 69% of Canadian CEOs globally said their companies are preparing for the impact of climate change initiatives (61% globally) and believe those efforts will improve their company's reputation. The recession had little impact on the green momentum; 58% of Canadian companies with climate change initiatives saw no effect of the recession on their strategies (61% globally) and 21% raised such investments last year (17% globally).

Survey Methodology

For the PricewaterhouseCoopers 13th Annual Global CEO Survey, 1,198 interviews with CEOs were conducted in 52 countries during the last quarter of 2009. The research was coordinated by the PricewaterhouseCoopers International Survey Unit, Belfast, Northern Ireland, in cooperation with project managers and a global advisory board of PwC partners.

By region, 535 interviews were conducted in Europe (Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Romania, Russia, Spain, Sweden, Switzerland, Turkey, UK, Ukraine), 289 in Asia Pacific (Australia, China/Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Singapore, Taiwan, Thailand, Vietnam), 167 in Latin America (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela), 139 in North America (US, Canada), and 68 in the Middle East and Africa. In Canada, 39 interviews were completed.

The full survey report plus supporting graphics which can be downloaded are available at www.pwc.com/ceosurvey.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,300 partners and staff in offices across the country.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity.

SOURCE PwC

For further information: For further information: Kiran Chauhan, (416) 947-8983, kiran.chauhan@ca.pwc.com

Organization Profile

PwC

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890