Economic woes zap optimism of Apec CEOs
Company CEOs from the Asia-Pacific region are least optimistic this year since 2012 due mainly to concerns about the global economy, cyber security, exposure to natural disaster risks and regional and geopolitical tensions, according to the latest results of PricewaterhouseCooper’s annual Apec CEO Survey.
But in the case of the Philippines, optimism among businessmen remained better than the region-wide sentiment as majority of local firms’ revenues were seen growing in the next 12 months.
The survey of more than 800 Apec business leaders noted that “volatility in the financial markets this summer took a toll on CEO confidence” with just 28 percent of those polled saying they remained “very confident” their organization would see revenue growth over the next 12 months.
“That’s down from 46 percent a year ago and it is the lowest level since PwC started tracking 12-month confidence for Asia-Pacific CEOs in 2012,” a statement from the international audit and consulting firm said.
The report pointed out, however, that confidence levels across the 21-economy Apec bloc remained uneven, with the Philippine CEOs, in particular, standing out.
“Fifty-one percent of business leaders are very confident of business growth in the Philippines during the next year. This compares with 34 percent in the US and 20 percent in China,” PwC said. Across Apec, only 28 percent of business leaders were “very optimistic” of revenue growth over the next 12 months.
“Interestingly, in the Philippines’ case, according to Oxford Economics analysis, the economy is relatively well-placed to weather today’s global market volatility,” PwC said in the report titled “CEO confidence in Asia-Pacific shaken but strong.”
For 2015, there was “some marked contrast” in confidence levels by size of company. Only 15 percent of CEOs from Apec mid-sized firms were very confident of revenue growth in the next 12 months.
“It is testament to the squeeze that mid-sized companies feel when they have expanded beyond their traditional markets but are not large enough to easily weather some shocks to the system,” the report said.
“Despite their dwindling confidence in revenue growth, the majority of CEOs (53 percent) still plan to increase investments over the next 12 months, with most of that investment (68 percent) planned for the Apec region,” the report said.
“There’s also a clear diversification of investments within the Apec region. While China, US and Indonesia remain the main draws for CEO business investments, the Philippines, Vietnam and Singapore economies are attractive for CEOs and where around half of CEOs say they plan to raise investments during the next year.” In the survey, 45 percent of respondents said they deemed investments in the Philippines to increase over the next 12 months.
