CEO confidence rebounds. More jobs up for grabs?

40 per cent of CEOs expect to increase headcount this year

This rising confidence has translated into a planned boost in recruitment, with nearly 40 per cent of CEOs expecting to increase their headcount this year.

Contrasting with 25 per cent of CEOs planning job cuts over the next year, down from nearly half who decreased headcount in the past 12 months.

In Asia Pacific and Canada about half of CEOs are looking to increase employment in 2010, and this figure leaps to over 60 per cent in Brazil. Meanwhile, nearly a fifth of UK CEOs say they expect their headcount to rise by more than 8 per cent in 2010.

Overall, the survey found that 81 per cent of CEOs worldwide are confident of their prospects for the next 12 months, while only 18 per cent said they remained pessimistic. The results compare with 64 per cent who said they were confident a year ago and 35 per cent who were pessimistic. Thirty-one per cent of CEOs said they were now "very confident" of their short term prospects, up 10 percentage points from last year, a low point in CEO confidence since PwC began its tracking. The survey results were released at the World Economic Forum annual meeting in Davos.

Gaps have narrowed

The survey revealed striking differences in confidence levels -- and by extension the impact of the global recession -- among CEOs in emerging economies and those in developed nations.

In North America and Western Europe, for example, about 80 per cent of CEOs said they were confident of growth in the next year. That compared with 91 per cent in Latin America and in China/Hong Kong, and 97 per cent in India.

Looking at the longer term, the results were more even. Overall, more than 90 per cent of CEOs expressed confidence in growth over the next three years. Those results, coming at the start of a new decade, were about on par with confidence levels of CEOs in PwC’s 2000 survey.

But 10 years ago the economic split was very different, with 42 per cent of North American CEOs extremely optimistic – twice as many as in Asia.

Fears for the future

Protracted global recession remains the biggest overall concern of CEOs around the world (65 per cent), followed closely by fear of over-regulation (60 per cent).

More CEOs are "extremely concerned" about over-regulation (27 per cent) than any other threat to business growth. Other high-ranking potential business threats included instability in capital markets, and exchange rate volatility.

At the other end of the spectrum, concerns over terrorism and infrastructure were cited by less than a third of CEOs globally as threats to growth.

Love-hate relationship with regulators

CEOs were very clear about the threat of over-regulation.

Over two-thirds of CEOs disagreed with the notion that governments have reduced the overall regulatory burden. They also opposed government ownership in the private sector even in the worst of times – nearly half agreed that government ownership helps to stabilise an industry during a crisis.

CEOs from two sectors that received considerable government support during the crisis – automakers and banks – were amongst the most appreciative of government ownership in troubled times.

At the same time, CEOs were optimistic about governments’ efforts to address systemic risks such as another economic crisis – 65 per cent of CEOs agreed that regulatory cooperation will help successfully mitigate systemic risks.

Combating the effects of recession

To combat recession, nearly 90 per cent of all CEOs said their companies had initiated cost-cutting measures in the past 12 months, led by those in the US, Western Europe and the UK. And nearly 80 per cent overall said they would seek cost cuts over the next three years.

Public trust and consumer behaviour

Over one in four CEOs believes their industry’s reputation has been tarnished by the downturn. However, 61 per cent of CEOs in the banking and capital markets sector said there has been a fall in trust in their industry.

Nearly half of CEOs are concerned that the recession caused a permanent shift in consumer behaviour. Most say that consumers will place greater importance on a company's social reputation (64 per cent), spend less and save more (63 per cent), or be more active in product development (60 per cent).