The Wall Street Journal-20080123-Davos 2008- Recession Fears Give Business Chiefs Less Hope for -08 Revenue Growth
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Davos 2008: Recession Fears Give Business Chiefs Less Hope for '08 Revenue Growth
DAVOS, Switzerland -- International business chiefs see a global recession as the major threat to revenue growth in 2008, according to an annual survey of chief executives by PricewaterhouseCoopers.
For the first time since 2003, CEO confidence fell regarding revenue growth over the next 12 months. The most dramatic downturn came in North America, where 35% expressed confidence, compared with 53% a year ago, according to the survey, which was released at the World Economic Forum annual meeting yesterday.
"The credit crunch and the slowdown in the Western economies have created a clear split in the confidence levels of CEOs around the world," said Samuel A. DiPiazza, global chief executive of PricewaterhouseCoopers.
But CEO confidence in the Asia-Pacific region, Latin America and Central and Eastern Europe increased, as it did in China and India, where 73% and 90% of CEOs, respectively, were very confident about their growth prospects.
Mr. DiPiazza noted the regional split in confidence. "The possibility that the downturn could worsen into recession looms large for CEOs in established economies like the U.S. and Western Europe. In the newly emerged economies, CEO confidence remains strong, perhaps because they have experienced nothing but rapid expansion for a decade or more," he said.
The threat of overregulation, which has consistently been the greatest CEO concern, was mentioned by 59% of respondents to the survey, compared with 73% last year.
Global merger-and-acquisition activity is also expected to rise, according to the study.
PWC interviewed 1,150 chief executives in 50 countries for the survey.
