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Asia-Pacific CEOs' confidence on growing business at its lowest since 2012: survey
CONFIDENCE levels on business growth among the Asia-Pacific chief executives are at their lowest levels since 2012, said PwC in its fifth annual Asia-Pacific Economic Cooperation CEO survey.
They have raised several concerns ahead of the annual Apec Leaders Meeting that is to take place from Nov 18 to 19.
Volatility in the financial markets has taken its toll on CEO confidence with just 28 per cent of business leaders now "very confident" their organisation will see revenue growth in the next 12 months. This is down from 46 per cent a year ago, and is the lowest level since PwC started tracking 12-month confidence for Asia-Pacific CEOs in 2012.
Cyber security, exposure to natural disaster risks and regional geopolitical tensions are also among the leading threats to business investment and growth, the survey found.
Still, 51 per cent of business leaders were very confident of business growth in the Philippines in the next year, compared to 34 per cent in the US and 20 per cent in China.
Mid-sized firms were found to be less than half as confident - with only 15 per cent very confident of revenue growth in the next 12 months - a testament to the squeeze that mid-sized companies feel when they have expanded beyond traditional markets but are not large enough to easily weather shocks to the system, said PwC.
Despite the gloomy sentiments, the majority of CEOs (53 per cent) still plan to increase investments over the next 12 months, with most of that investment (68 per cent) planned for the Apec region.
More of the 800 Apec business leaders surveyed - PwC's largest sample ever - point at expanded broadband access and increased participation in the digital economy as holding the most promise for their business from regional connectivity, ahead of regional trade projects or new infrastructure in underdeveloped areas of the region.
PwC said those polled believe modernisation through technology will be widespread in the Asia-Pacific region by 2020. The survey said Apec CEOs believe the Asean Economic Community is the "mega regional" game changer, and have hopes that the Trans-Pacific Partnership (TPP) will boost exports and fuel regional growth.
Said Dennis M Nally, chairman of PricewaterhouseCoopers International Ltd: "Free trade doesn't automatically mean inclusive growth. A sizeable proportion of CEOs think free trade could significantly harm small- and medium-sized enterprises. And for people on the margins of the economy to participate in and benefit from growth and free trade in the Apec region, access to high-quality education at all levels and improved transport systems are key, according to the CEOs."
A third of respondents also indicated they are now less confident in profit margin improvement from domestic operations, but are more optimistic in areas where they can assert control, such as launching new products and services.
"CEOs see that services are becoming more important to Asia Pacific as global trade in goods falters. This will accelerate demand for management and IT consulting, logistics expertise as well as risk management services," the report noted.
The study was released on Monday at the start of the Apec CEO Summit in Manila, the Philippines.