Half of the region's top execs expect growth to improve in 2019 despite economic uncertainties.
Half of Asia Pacific’s (APAC) CEOs are optimistic that global growth will improve in the next 12 months as executives look for new opportunities and are responding with agility amidst trade conflicts and policy uncertainties, according to PwC’s latest global CEO survey.
APAC executives were found to be more optimistic compared to the average of 42% globally, although this was observed to be significantly lower from the high of 57% recorded in 2018. “CEOs’ views on global economic growth are more polarised this year but trending downward,” PwC noted, with the most pronounced shift amongst CEOs in North America on the back of fading fiscal stimulus and escalating trade tensions.
The unease about global economic growth also lowered CEOs’ confidence in their own companies’ outlook in the short term, with only 35% of executives ‘very confident’ in their own growth prospects in 2019. This is a large drop from the 42% reported in 2018. APAC executives in particular were observed to have stronger confidence in their revenue growth prospects over a three-year time frame compared to the next 12 months.
Almost all or 90% of China’s CEOs expressed concerns over trade conflicts, policy uncertainty and protectionism, which have replaced climate change and an increasing tax burden as the top ten list of threats to business growth.
Nevertheless, APAC’s CEOs are taking proactive approaches to address market changes such as adjusting supply chain and sourcing strategies, as well as enhancing digital capabilities through increased investments in technology and digitisation.
The survey found that CEOs continued to face issues with their own data capabilities which resulted in a significant information gap. “Despite billions of dollars of investments made in IT infrastructure over this time period, CEOs report still not receiving comprehensive data needed to make key decisions about long-term success and durability of their business,” PwC highlighted.
Three quarters of APAC executives experienced an information gap regarding their customers’ needs as well as business risks (73%), which PwC said indicated that value from data is not being sufficiently extracted.
“To drive revenue this year, CEOs plan to rely primarily on operational efficiencies at 77% and organic growth at 71%,” PwC added. “The majority of executives in the APAC region are increasing headcount over the next 12 months to fuel business growth.”
Meanwhile, almost all or 85% of CEOs agreed that artificial intelligence could benefit their business over the next five years, with nearly two thirds viewing it as something that will have a larger impact than the internet.
“Despite this bullish view, 23% of CEOs currently have no plans to pursue AI with a further 35% planning to do so in the next three years,” PwC commented. “Fewer than one in ten CEOs have implemented AI on a wide scale.”
With respect to the top markets for growth, APAC CEOs chose US (31%), mainland China (30%) and Australia (11%) as the most important territories for their growth prospects.
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