UK CEO confidence shaky but some optimism as recruitment looks up for 2010

With 63 per cent of UK CEOs believing recovery in the economy will occur in 2010, there are signs of cautious optimism, according to the PricewaterhouseCoopers 13^th annual Global CEO survey launched at the World Economic Forum in Davos.

This rising confidence may halt falling employment levels as 42 per cent of UK business leaders say they hope to increase their headcount in the next 12 months.  

This reflects a decrease in the Northern Ireland unemployment, down to 6.8 per cent in January from 7.1 per cent in mid-2009.

For the 13^th annual Global CEO Survey, PwC’s Belfast-based International Survey Unit surveyed 1,198 global business leaders between September and November 2009, including 69 in the UK.

Overall, the survey found UK business leaders are proving more upbeat than their European counterparts. Only 34 per cent of Dutch CEOs expect to increase headcount, followed by France (30 per cent), Italy (29 per cent), Germany (27 per cent) and Spain (9 per cent).

But emerging nations are much more confident of recovery and growth with 61 per cent of Brazilian CEOs planning 2010 recruitment, followed by India (59 per cent) and China (53 per cent).

Despite the positive outlook for employment, three quarters of UK CEOs expect consumers to spend less and save more in 2010. Consequently, 63 per cent plan to make some changes to their business as they manage the impact of shifting consumer behaviour.

Worryingly, UK business growth may be home-grown, with a mere 14 per cent of UK CEOs expecting to grow their business in new markets in 2010. That’s well down on 22 per cent looking to export growth in 2009 and 28 per cent in 2008. 

Ian Powell, UK Chairman and Senior Partner, said:

“It is encouraging to see that UK CEOs are cautiously preparing for an upturn. Growth expectations have been severely impacted by the challenges of the financial and economic crisis and the fears of a protracted recession are beginning to recede.

“However, there remain significant variances in UK business leaders’ short term and long term outlooks, perhaps as a result of concerns about how UK public debt levels are reduced.

“Across the world, outlook is even more divided geographically with emerging economies showing much stronger signs of confidence than CEOs in the developed territories.

“The upturn in employment prospects will be widely welcomed but this news must be tempered given that the bounce back may be a response to employment cuts made in the UK over the last 12 months.” 

The key findings of the report included:

• A quarter of UK CEOs are very confident about revenue growth in the next 12 months – an increase of 10% on the previous year.
• While 50 per cent of UK CEOs believe recovery in their industry will occur in 2010, 26% do not expect to see their sector recover until 2011
• Better penetration of existing markets is seen as the main opportunity for business growth in the next 12 months. 
• The top three threats in the UK are exchange rate volatility, over-regulation and macroeconomic imbalances.
• 59% of UK CEOs think that compliance and reporting to meet capital market requirements will become more difficult. Access to capital from alternative investors and through equity markets are less of a worry.
• 74% of UK CEOS are planning to implement a cost reduction initiative in the coming 12 months.
• 42% of UK CEOs are planning to increase headcount, 30% of UK CEOs will keep headcount the same, and 28% of UK CEOs will reduce headcount.

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Email: John Compton
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