Fear of Recession is Dominant Concern Among Global CEOs; CEOs in Emerging Economies...

Fear of Recession is Dominant Concern Among Global CEOs; CEOs in Emerging
Economies More Confident Than in Developed Countries

DAVOS, Switzerland, Jan. 22, 2008 (PRIME NEWSWIRE) -- CEOs' confidence about
prospects for business declined for the first time since the 2003 survey and
fear of a global recession emerged as the major threat to growth in
PricewaterhouseCoopers 11th Annual Global CEO Survey. Compared to last year,
possible economic downturn is the only risk factor to increase in 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 percentage of CEOs who said they are "very confident" about revenue growth
over the next 12 months fell two percentage points from last year to 50%. CEOs,
however, remained nearly twice as confident as they were in 2003. The survey
results were released today at the World Economic Forum annual meeting in Davos,
Switzerland.

The overall drop in business confidence was most pronounced in North America,
where just 35% of CEOs said they were 'very confident' about growth, compared to
53% last year, a decline of more than a third. Confidence among Western European
CEOs also declined to 44%, 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% in each of those regions.
This growing confidence is especially strong in China and India -- where 73% and
90% of CEOs, respectively, were "very confident" about the prospects for growth
in the next 12 months.

This year's results marked the first time since the survey's inception 11 years
ago, that CEOs cited a potential economic downturn as the major threat to their
business growth prospects. Until now, CEOs had consistently rated
over-regulation as the primary risk to their business. Terrorism and the threat
of pandemic, once major CEO concerns were cited by only 31% and 28% of
respondents, respectively.

"The credit crunch and the slowdown in the Western economies have created a
clear split in the confidence levels of CEOs around the world," said Samuel A.
DiPiazza, Global CEO of PricewaterhouseCoopers. "The possibility that the
downturn could worsen into recession looms large for CEOs in established
economies like the U.S. and Western Europe. In the newly-emerged economies CEO
confidence remains strong, perhaps because they have experienced nothing but
rapid expansion for a decade or more."

Further highlights of the survey results:

Climate Change Threat Requires Government Action

Climate change, despite the highly-visible debate over global warming, was cited
as a concern by only 34% of CEOs worldwide (down from 40% last year), while the
remainder said they did not feel this was a threat to their business. Only 37%
said their organisation was investing significant resources to address the risks
and opportunities presented by climate change. However, in marked contrast to
their fear of over-regulation, four-fifths of CEOs, called for an increase in
government action to reduce emissions. Support for increased government
intervention was highest among CEOs in Asia Pacific, at 90%, and lowest in North
America, 64%. CEOs also favoured collaborative efforts to mitigate climate
change. Overall 73% of CEOs believed that businesses need to collaborate more
effectively with industry peers and business partners in mitigating climate
change. This number rose to 82% in Asia Pacific and declined to 58% in North
America.

Threat of Over-Regulation Declines

In contrast to previous years, when regulatory issues such as Sarbanes-Oxley
dominated CEOs thoughts, the threat of over-regulation declined this year,
though it remained among the top three concerns of CEOs. Over-regulation was
mentioned by 59% of respondents, down from 73% in the previous survey. CEOs felt
labour laws, tax regimes, and education were the top areas in which governments
could make improvements. Just 5% felt improvements were needed in regulation
over initial public offerings or listings on stock exchanges. Overall, more than
half of CEOs said that governments should drive convergence of tax and
regulatory frameworks.

Existing Markets, New Products Keys to Short-Term Growth

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. As
they did last year, CEOs said they preferred to finance future growth from
within the company, rather than external sources such as the debt or equity
markets.

Global M&A Activity Looks Set To Rise in 2008

Globally, 24% of CEOs said their company had completed at least one cross-border
merger or acquisition within the past 12 months, while 31% plan to do so within
the next 12 months. CEOs in Western Europe were most likely to have participated
in cross-border M&A activity. The most popular destinations for M&A activity are
Asia, Western Europe, Eastern Europe and North America.

Interest in M&A in 2008 is highest in Asia Pacific, where CEOs are most
confident, and where Asia Pacific companies have increasingly become the
acquirers rather than the acquired. Asian Pacific CEOs are planning M&A activity
both close to home and abroad. Only 23% of Asia Pacific CEOs have completed at
least one cross-border deal within the past year, but 34% -- a higher percentage
than in any other region -- say that they intend to do so within the next 12
months. Of those Asia Pacific CEOs planning M&A in the next 12 months, 25%
foresee a transaction in Western Europe, 31% in North America and 73% closer to
home in Asia.

Obstacles to M&A activity were headed by cultural issues and financial
considerations. However, the issues of political interference or opposition and
possible backlash against a foreign presence in local markets have increased as
barriers to cross-border M&A.

Collaborative Business Networks Emerging

Overall, more than half the CEOs said that collaborative networks will become a
major organisational principle for business, and only 17% 'think the costs and
risks of networks outweigh the benefits.' Nevertheless, 37% still regard the
establishment of networks as a secondary activity.

There was marked regional difference in support for business networks. More than
60% of CEOs in Asia Pacific believe that networks will be a defining
organisational principle, with the number rising to 83% in India. However, the
percentage fell to 44% in Central and Eastern Europe.

"Collaboration across business networks is becoming an increasingly important
strategy for successful companies, though it may not be appropriate in every
circumstance," Mr. DiPiazza said.

War for Talent Continues to Rage

The war for talent remains a key concern among CEOs. Overall, more than
two-thirds of all CEOs -- 85% in North America -- said their time was best spent
dealing with people issues. CEOs in Asia Pacific, despite the region's
substantial working age populations, were the most concerned over the
availability of key skills. Asia Pacific CEOs were most likely to believe that
their organisation needs to change the way it develops talent.

CEOs said that combined technical and business experience, global work
experience and leadership skills are the most difficult areas for their
companies to recruit. Global experience, however, was ranked last among a list
of skills that are critical to their organisation.

"Making sure that their companies have the right talent in place remains a core
issue for CEOs around the world," Mr. DiPiazza said. "Regardless of the other
issues swirling around them, CEOs clearly understand that having people with the
right balance of commercial, technical and management skills is the key to
success in their organisation."

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax
and advisory services to build public trust and enhance value for its clients
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which is a separate and independent legal entity.

Survey Methodology

For the PricewaterhouseCoopers 11th Annual Global CEO Survey, 1,150 interviews
with CEOs were conducted in 50 countries during the last quarter of 2007. The
majority of interviews were conducted by telephone. A postal survey was
administered in Japan. Face-to-face interviews were conducted in Kenya and
China. The research was coordinated by the PricewaterhouseCoopers International
Survey Unit, Belfast, Northern Ireland, in cooperation with project managers and
a global advisory board of PricewaterhouseCoopers partners. By region, 454
interviews were conducted in Western Europe (Austria, Belgium, Cyprus, Denmark,
Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, UK), 277 in Asia Pacific (Australia, China, Hong
Kong, India, Indonesia, Japan, Korea, Malaysia, Singapore, Taiwan, Thailand,
Vietnam), 136 in Latin America (Argentina, Bolivia, Brazil, Chile, Colombia,
Ecuador, Paraguay, Peru, Uruguay, Venezuela) , 130 in North America (US,
Canada,), 86 in Central and Eastern Europe (Czech Republic, Estonia, Hungary,
Poland, Russia, Ukraine) and 37 in the Middle East and Africa (Saudi Arabia,
South Africa, Kenya).

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CONTACT: Porter Novelli
for PricewaterhouseCoopers LLP
Kate Alexander
+1 (212)-601-8286
kate.alexander@porternovelli.com

PricewaterhouseCoopers LLP
Mike Ascolese
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mike.ascolese@us.pwc.com