CEO Confidence Plummets to New Low

CEO Confidence Plummets to New Low According to PricewaterhouseCoopers Survey

Depth of the Crisis Impacts All Regions, Sectors

Talent, Over-Regulation Among Top Concerns

DAVOS, Switzerland, Jan. 28, 2009 (GLOBE NEWSWIRE) -- Battered by
recession, CEOs' confidence about future prospects for business has
plummeted and executives expect a slow, gradual recovery over the next
three years, PricewaterhouseCoopers 12th Annual Global CEO Survey has
found.

CEO confidence plunged to its lowest level since 2003, when PwC began
tracking CEOs' forecasts. Worldwide, just 21 per cent of CEOs said they
were very confident of revenue growth in the next 12 months, down from
50 per cent in last year's survey. And more than a quarter of CEOs said
they were pessimistic about prospects for the coming year. The survey
results were released today at the World Economic Forum annual meeting
in Davos, Switzerland.

CEOs worldwide were also gloomier about longer term growth as well,
predicting a slow recovery. Only 34 per cent said they were very
confident of growth over the next three years, down from 42 per cent
last year, when CEOs were just beginning to recognise the full impact
of the credit crisis on the global economy. Illustrating the changing
mood, CEOs confidence worsened over the course of the surveying as
negative economic news unfolded.

Pessimism prevailed across all geographic regions, business sectors and
levels of economic development, the survey found. Only 15 per cent of
CEOs in North America and 15 per cent in Western Europe expressed
confidence about growth prospects for the next 12 months. This compared
with 21 per cent in the emerging economies of Central and Eastern
Europe, 31 per cent in Asia Pacific, and 21 per cent in Latin America.

"The speed and intensity of the recession has rocked the psyches of
CEOs and created a global crisis of confidence," said
PricewaterhouseCoopers' Global CEO Samuel A. DiPiazza, Jr. "CEOs are
most concerned about the immediate survival of their companies. Even in
once rapidly emerging economies, companies are now coping with issues
like unavailable credit, sluggish capital markets, and collapsing
demand.

"The severity and duration of the recession are difficult to predict
and CEOs are balancing the challenges of successfully managing through
the downturn while also remaining prepared for economic turnaround.
Their prospects for recovery are truly connected," he added.

The impact of the recession in the world's major economies, cited by 85
per cent of survey respondents worldwide, continued to dominate
concerns of CEOs and was the only risk factor to increase among CEOs'
concerns. Other major risk factors included disruption in the capital
markets, cited by 72 per cent, over-regulation, 55 per cent, energy
costs, 50 per cent, and availability of key talent, 46 per cent.

Further highlights of the survey results:

Banking Crisis Pervasive

CEOs expect the worldwide banking crisis to have a broad impact on
business, affecting companies across all geographic regions and
business sectors. Nearly 70 per cent of CEOs said their companies will
be affected by the credit crisis. Of those, nearly 80 per cent said
they faced higher financing costs, and nearly 70 per cent said they
would delay planned investments as a result. Companies in the banking,
utilities, construction, entertainment and automotive sectors are most
likely to be impacted, CEOs said.

Those CEOs whose companies were anticipating growth said they would
fund it primarily thorough internal cash flow, followed by the debt and
equity markets.

Long-term Factors Remain on the Agenda

Despite the severity of current economic conditions, CEOs continued to
be concerned with long term needs. Access to key talent remained a
vital concern; only 26 per cent said they planned to reduce headcount
in the coming year, while 35 per cent planned to maintain staffing
levels.

Moreover, 72 per cent of CEOs predicted that the pressure on natural
resources will worsen in the future. Respondents said that dependence
on carbon-based energy cited by 61 per cent, climate change 56 per
cent, overpopulation 55 per cent, and scarcity of fresh water. 50 per
cent, will have an impact on long-term success.

About 75 per cent of respondents said they are already responding by
developing new products and services and by making changes to their
operations. More than half expect to make a return on those investments
in the next 12 months.

JVs to overtake cross-border M&A Activity

The percentage of CEOs who believe that Joint Ventures (JVs) will play
a greater role than M&A in cross-border growth has surged, particularly
in Western Europe and Latin America. This may reflect the lower cost
and risk level associated with JVs, as well as the increasing
popularity of collaboration to deal with the challenges of cross border
growth.

However, merger and acquisition activity has decreased. Only 20 per
cent of respondents said they had completed such a transaction last
year. The decline in M&A was most pronounced in emerging economies in
Asia and Eastern Europe. Cultural differences, unexpected costs and
delivering deal value were the three most common concerns of CEOs in
considering M&A.

Energy and Talent Present Challenges

Buffeted by the recession and volatile commodity and energy costs, CEOs
from all regions of the world said they were seeking to sustain their
businesses and prepare for economic rebound. Overall, more than 80 per
cent said they were taking steps to reduce energy costs by finding
efficiencies in their operations, and more than half said they were
seeking alternative energy sources. Companies were also investing in
technology to reduce energy dependence and trying to secure future
energy supplies.

Finding and retaining top talent also remains a major priority for
CEOs. A shortage of candidates with essential skills was cited as a key
challenge by nearly 70 per cent of respondents. Other human resource
concerns included recruiting and integrating younger employees,
providing attractive career paths, and competition for talent within
their sector. CEOs cited strategies such as creating more flexible work
environments, redeploying key employees and participation in social
activism as means to overcome talent challenges.

Better Information Needed to Manage Risk

CEOs recognised a huge gap in the information required to manage risk,
and fuel long-term success. While 92 per cent said information about
risk is important, only 23 per cent said they received comprehensive
information about it. In addition, just 21 per cent get comprehensive
information about the needs and preferences of customers and clients.

The 'regulation paradox'

CEOs said they recognise the need to collaborate with government to
address systemic problems. Yet, while 55 per cent of CEOs remain
concerned about overregulation as an obstacle to growth, nearly half
also said their governments have not done enough to create a skilled
workforce, and 38 per cent said governments could do more to improve
infrastructure. Likewise, more than 80 per cent of CEOs favoured clear,
consistent government policies to address climate change, but just 28
per cent believe that their governments have such policies.

Survey Methodology

For the PricewaterhouseCoopers 12th Annual Global CEO Survey, 1,124
interviews with CEOs were conducted in 50 countries during the last
quarter of 2008. The majority of interviews were conducted by
telephone. 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, 500 interviews were conducted in Europe (Austria, Belgium,
Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Russia,
Spain, Sweden, Switzerland, Turkey, UK, Ukraine), 276 in Asia Pacific
(Australia, China/Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
Singapore, Taiwan, Thailand, Vietnam), 168 in Latin America (Argentina,
Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru,
Uruguay, Venezuela), 138 in North America (U.S., Canada), and 42 in the
Middle East and Africa.

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 155,000 people
in 153 countries across our network share their thinking, experience
and solutions to develop fresh perspectives and practical advice.
"PricewaterhouseCoopers" refers to the network of member firms of
PricewaterhouseCoopers International Limited, each of which is a
separate and independent legal entity.

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