Asian CEOs hopeful even as global mood continues to darken, PwC survey shows
- Roughly half of CEOs in Asia think global growth will improve over the coming year
Asian business leaders are more optimistic over the coming year’s economic outlook than global counterparts, though all stand more worried than this time last year, according to a survey by PwC.
Half of Asia-Pacific chief executive officers think global growth will improve over the next 12 months, compared to 42 per cent worldwide, according to the survey.
That is not to say, however, that optimism reigns among the region’s business leaders.
Overall, optimism has faded from last year, when 57 per cent of executives believed the economy would improve.
In North America, only 37 per cent said they were optimistic, compared to 62 per cent last year. In the Middle East, 28 per cent responded as optimistic, compared to 52 per cent in 2018.
Last year marked the start of the ongoing trade war between the US and China, which has continued into 2019 alongside issues such as Brexit and a US government shutdown, all of which are playing on a downbeat sentiment.
“Although trade conflicts, policy uncertainty and unclear economic prospects keep APAC executives awake at night, they have started to look for new growth opportunities and are responding with agility,” said Raymund Chao, chairman of PwC Asia Pacific and Greater China.
Chao said regional executives had responded with innovations in sourcing and supply chain management, along with considerable investments in new technology.
Markets globally have been volatile. In 2018 Hong Kong’s Hang Seng Index shed 14 per cent in its worst performance in seven years, and mainland China’s Shanghai Composite declined 28 per cent to make it the world’s worst-performing stock benchmark.
The survey, published annually, polled more than 1,300 CEOs around the world. Its release coincided with a global outlook downgrade by the International Monetary Foundation, its second downgrade in three months. The Washington-based agency forecast global GDP growth of 3.5 per cent this year, cutting its forecast of 3.7 per cent growth in October. The forecast reflects the weakest pace of growth in three years, setting a downbeat tone for the World Economic Forum, which kicks off in Davos, Switzerland on Tuesday.
China released economic data on Monday showing its economy expanded by 6.6 per cent in 2018, the slowest pace since 1990.
Among CEOs in China, 90 per cent responded as being “extremely concerned” about trade conflicts.
Globally, nearly 30 per cent of CEOs expect economic growth to decline this year, a jump of roughly six times last year’s level.
“CEO’s views of the global economy mirror the major economic outlooks, which are adjusting their forecasts downward in 2019,” said Bob Moritz, global chairman of PwC. “With the rise of trade tension and protectionism it stands to reason that confidence is waning. The turn away from the US market and shift in Chinese investment to other countries are reactions to the uncertainty surrounding the ongoing trade dispute between the US and China.”