Chief executives in ASEAN, including Singapore, are defying the gloomy mood among their counterparts across the globe over the economic outlook.
According to a new survey by consultancy PwC, only 37 per cent of CEOs – just over one in three – worldwide believe the economy will improve this year.
But in ASEAN the figure is 49 per cent, or almost one in two.
CEOs in the region are also more confident than their global counterparts about their company’s turnover and growth opportunities over the next three years.
And supporting their belief that business will be better, 67 per cent of ASEAN CEOs expect to boost staff strength this year, while 13 per cent are budgeting a cut in headcount – compared with the global average of 50 per cent and 21 per cent respectively.
“The increase in CEOs’ confidence in their companies’ revenue growth in ASEAN is a strong signal that business sentiment in the region remains strong, despite a less optimistic outlook globally,” said PwC Singapore executive chairman Yeoh Oon Jin in a statement.
“We are confident that Southeast Asia, as a region, will continue to grow as an attractive investment destination. This bodes well for Singapore as we remain a favoured regional headquarters location.”
Across the globe, the proportion of head honchos holding more bearish views also jumped – with 17 per cent believing that global economic growth will decline this year, more than double last year’s figure of 7 per cent.
The downbeat views came as both the World Bank and the International Monetary Fund (IMF) cut their forecasts for global growth.
The IMF announced yesterday that the world economy will likely grow 3.5 per cent this year, down from its earlier prediction of 3.8 per cent. The World Bank said last week that global growth would likely hit 3 per cent this year, down from an initial forecast of 3.4 per cent.
CEOs from economies that are highly dependent on oil production have some of the most pessimistic views, as the plunge in the price of crude oil hit their bottom line.
Russian CEOs went from being the most confident of revenue growth last year, with 53 per cent expecting expansion, to the least confident this year, as only 16 per cent anticipate growth.
CEOs in the oil-exporting region of the Middle East are also bracing themselves for tougher times, with only 44 per cent “very confident” of higher sales, down from 69 per cent last year.
Even though the United States is the land of promise in terms of overseas growth markets for global heads, ASEAN chiefs ranked China ahead of the US in the survey.
Risks that the ASEAN CEOs are factoring into their plans include geopolitical uncertainty, a rising tax burden and over-regulation.
A total of 1,322 CEOs from 77 economies were surveyed between September and December last year. Results of the survey were disclosed at the opening of the World Economic Forum Annual Meeting in Davos, Switzerland. –The Straits Times
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