Amid global fears of economic recession, leaders of India Inc have emerged as most optimistic about their revenue growth over the next year, according to a global CEO survey.
In the survey conducted by international consultancy firm PricewaterhouseCoopers released on Wednesday, as many as 90 per cent of Indian CEOs said they are "very confident of revenue growth" in 2008. The confidence level among Indian executives was highest for any country and compared favourably with the global average of 50 per cent.
The global percentage of CEOs saying they were "very confident about revenue growth over the next 12 months" dipped from 52 per cent in the previous year.
CEOs from Brazil emerged as the second most confident (63 per cent), followed by Russia and China at 73 per cent each, enabling the BRIC countries capture the top four positions.
The survey further said that chief executives from across the world have become more concerned about a global recession that could put a halt to growth, but CEOs in emerging economies appeared more confident than their peers in the developed countries.
"The credit crunch and the slowdown in the Western economies have created a clear split in the confidence levels of CEOs around the world," PricewaterhouseCoopers Global CEO Samuel A DiPiazza said.
The annual PwC survey found that the possibility about downturn getting worse into a recession looms large for CEOs in established economies like the US and Western Europe. But, in the newly-emerged economies, CEO confidence remains strong, perhaps because they have experienced nothing but rapid expansion for a decade or more, DiPiazza added.
This is the first time since the survey's inception 11 years ago that top executives have cited a potential economic downturn as a major threat to their business growth prospects. Until now, CEOs had consistently rated over-regulation as the primary risk to their business.
The overall drop in business confidence was most pronounced in North America, where just 35 per cent of CEOs said they were 'very confident' about growth, compared to 53 per cent last year, a decline of more than a third. Confidence among West European CEOs also declined to 44 per cent, down by eight percentage points.
In contrast, CEO confidence in the surging economies of Asia Pacific, Latin America, and Central and Eastern Europe, increased, rising to about 55 per cent in each of those regions. This growing confidence is especially strong in China and India, it noted.
While 90 per cent of Indian CEOs said they were very confident about one-year revenue growth, around 70 per cent of them are confident about the revenue growth in the next three years compared to 42 per cent globally. CEO confidence about one-year revenue growth increased in Asia Pacific to 56 per cent from 49 per cent last year. CEOs in Italy emerged as the least optimistic with just 19 per cent of them saying they were "very confident", followed by France (28 per cent), Japan (31 per cent), Canada (33 per cent), US (36 per cent) and UK (43 per cent).
Compared to last year, possible economic downturn is the only risk factor to increase concern among CEOs. All other risks to growth, including energy supply, global climate change, and terrorism declined as business threats. Over-regulation and availability of talent were also top CEO concerns, the survey outlined.
Over-regulation was mentioned by 59 per cent of respondents, down from 73 per cent in the previous survey. CEOs felt labour laws, tax regimes and education were the top areas in which governments could make improvements. Just five per cent felt improvements were needed in regulation over initial public offerings or listings on stock exchanges.
Concern about the global economy also impacted CEOs' plans for expansion over the next 12 months. More CEOs now see their main opportunities for short-term growth coming from better penetration of existing markets or developing new products rather than from mergers and acquisitions or geographic expansion. CEOs said they preferred to finance future growth from within the company, rather than external sources such as the debt or equity markets. About 90 per cent of Indian CEOs prefer internally generated cash flows to finance growth.
