Region's chief executives turn gloomy

Region's chief executives turn gloomy

Nearly half of the business chief executives in Asean expect a decline in global GDP growth in 2019 according to the new global CEO survey by PwC.
Nearly half of the business chief executives in Asean expect a decline in global GDP growth in 2019 according to the new global CEO survey by PwC.

Nearly half of chief executives in Asean expect global economic growth to decline in the next 12 months, up from 10% last year -- a record jump in pessimism, according to PwC's latest global CEO survey.

Similarly, 28% of business leaders globally believe that global economic growth will slow, compared with just 5% last year.

The survey reported trade conflicts and geopolitical uncertainty as the top CEO worries.

Meanwhile, Asean CEOs are aware of the impact of artificial intelligence (AI) on business operations, with 72% saying it will have an even larger impact on the world than the internet revolution.

Still, 36% of Asean CEOs have no plans to pursue AI and 32% have plans in the next three years.

Sira Intarakumthornchai, chief executive of PwC Thailand, said the survey was carried out over September and October last year through a variety of methods, including telephone, online and even one-on-one interviews.

The survey polled 1,378 chief executives across 91 countries, including 78 from Asean.

"This year's survey reflects the bearish views of chief executives, who see the global outlook trending downward," Mr Sira said. "They view the US-China trade conflict and widespread geopolitical uncertainty, including over-regulation, as major risk factors."

He said the survey found that Asean chief executives were even more pessimistic than their global peers. This is the opposite of what the survey has found in the past, as CEOs in this region are usually quite optimistic.

Asean CEOs ranked trade conflicts as the biggest threat to their organisation's growth prospects at 83%. That was followed by geopolitical uncertainty at 81%, policy uncertainty at 78%, over-regulation at 77% and global economic volatility at 73%.

Lingering trade concerns over the US and China have prompted a majority of CEOs in Asean to adjust their supply chain and sourcing strategy (29%) and delay capital spending (29%). Some 17% are shifting their growth strategy to alternative markets such as Indonesia and Vietnam.

The unease about global economic growth has also hit confidence among chief executives about their company's revenue outlook in the short term.

Only 33% of Asean chief executives said they're very confident about their organisation's growth prospects over the next 12 months, down from 44% previously.

In the medium term (three years), just 39% believe their revenue will increase, down from 53% a year ago.

"In our new data-driven world, 82% of Asean chief executives are concerned about availability of key skills, primarily digital skills that are hard to find and in high demand," Mr Sira said. "That's followed by cyberthreats at 81% and speed of technological change at 72%."

He said the availability of key skills is a huge problem for Asean. With a lack of skilled talent, businesses are going to miss out on lots of opportunities -- competitive advantages, product and service development, and market expansion.

For the top three most important countries for growth, the survey found Asean CEOs mentioned China the most (42%), followed by Indonesia (24%) and the US (21%).

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