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CEOs head to Davos pessimistic about 2013

January 23, 2013
By JOHN HEILPRIN , THE ASSOCIATED PRESS

DAVOS, Switzerland - As high-powered CEOs flock to the snowy Swiss resort of Davos, they are loaded down with baggage - not just skis and iPads but concerns about the global economy, public mistrust, disappearing jobs and a heap of other challenges.

New survey results Tuesday showed a steady drop in the number of CEOs worldwide who are "very confident" that their companies will grow this year. The number fell from 48 percent in 2011 to 36 percent this year.

Amid this pessimism, most of them are carefully sticking to a few investments in tried-and-true markets, according to the survey by accounting firm PricewaterhouseCoopers.

Article Photos

AP PHOTO
People gather at the 'Davos lounge' inside the Congress Center and follow the latest tweets of participants on the eve of the opening of the 43rd Annual Meeting of the World Economic Forum, WEF, in Davos, Switzerland, Tuesday. As corporate leaders gather for the World Economic Forum in Davos amid a slow and shaky recovery, a new study looks at business leaders' moods and what they hope to do this year.

"Most are saying that the global economy will stay about the same for the next 12 months. So, not encouraging, maybe not discouraging, but clearly that's affecting their outlook for their own companies' growth prospects," PwC chairman Dennis Nally told The Associated Press in an interview.

"The degree of confidence across the board is really down, regardless of whether you're in a developing market or a developed market," he said.

It is down even in high-flying economies like China and Brazil. The most upbeat country was Russia, where 66 percent of CEOs are "very confident" of revenue growth in 2013, Nally said.

He called the survey results a strong message to governments that they must fix economic problems, including disputed regulations, government deficits and tax issues.

"All of those are impacting CEOs' levels of confidence to really deal with their businesses on a go-forward basis," he said in the PwC Lounge, an ultra-chic Davos party room with white sofas and chairs and orange and red flowers.

Uncertainty about tax and spending policies is at the root of the gloom, said John Viehmeyer, CEO of accounting firm KPMG's U.S. operations. He called it frustrating that U.S. government solutions "seem to be within our control" but still out of reach.

"I think we have an opportunity for the U.S. to lead the world onto a path of stronger economic footing and very robust economic recovery over the next five years," Viehmeyer told AP. "It's not going to be easy. There's going to be pain and sacrifice."

Nearly a quarter of the CEOs surveyed plan further job cuts - yet more than half of them say they have trouble finding people with the right job skills.

The U.N. labor agency said this week the jobs crisis has worsened; there were 197 million people who couldn't find a job in 2012 and another 39 million who have given up on looking for one.

Neely worries about a "lost generation" of job seekers and encourages young people to focus on gaining skills that are in demand - skills in areas such as the sciences, math, engineering and other technical areas.

Heading Tuesday into the glitzy World Economic Forum, where over 2,500 corporate elite will debate the world's top economic issues this week, many participants said their top worries are prospects for social unrest, a U.S. recession, cyber-attacks, natural disasters and a breakup of the 17-nation eurozone.

 
 

 

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