* 39 pct of CEOs very confident of growth vs 36 pct year ago
* Optimism grows about global economy in 2014 - PwC survey
* Worries mount over emerging markets and regulation
By Ben Hirschler
DAVOS, Switzerland, Jan 21 Business leaders
gathering for their annual high-profile networking forum in
Davos are feeling a bit better about their companies' prospects
and a lot more so about the broader economic outlook.
But they still have a long list of worries.
Half a decade on from a financial crisis that brought the
world economy to the brink, the immediate threats to corporate
profits are receding and chief executives are encouraged by a
brightening outlook in both the United States and Europe.
Yet they do not have to look far for future threats - from a
worrisome slowdown in emerging markets to uncertainty over the
tapering of Federal Reserve stimulus and concerns over increased
The annual PricewaterhouseCoopers (PwC) survey of more than
1,300 CEOs found that 39 percent were "very confident" their
company's revenues would grow in 2014, up from 36 percent a year
While the trend is encouraging, the reading is still down on
the 50 percent-plus levels seen in 2007 and 2008, highlighting
how the return to growth remains fragile and uncertain.
Significantly, CEOs were more upbeat in assessing the
macro-economic outlook than that of their own companies, with 44
percent now believing the global economy will improve in the
next 12 months against just 18 percent a year ago.
The difference reflects the fact that economic issues are
not the only ones weighing on executives' minds, according to
Dennis Nally, the chairman of PwC International, who presented
the findings on the eve of the Jan. 22-25 World Economic Forum.
"Even though there is a higher degree of optimism about the
global economy, there are still some pretty big challenges
elsewhere to do with the volatility of certain economies,
concerns around regulation and shifts in technology," he said.
In fact, concerns about over-regulation have moved to the
top of the agenda in the past year as new rules - many of which
have been debated since 2008 - are now being implemented,
raising the cost of compliance and taking up management time.
The weakness in some emerging markets and uncertainties
about where this leaves corporate strategies is a big
talking-point for many multinational companies, since it
coincides with recovery in the West and signs of progress in
Japan's efforts to counter years of economic stagnation.
In response, a number of CEOs are turning back to advanced
economies for growth, with the United States, Germany and
Britain now seen as more promising than previous high-flyers
such as India and Brazil.
Nally said the trend was a key "headline" for Davos 2014 - a
view shared by other pundits converging on the Swiss ski resort
for four days of high-level discussions and networking.
Economies considered "dull and old" like the United States,
Britain, Germany and Japan will actually turn out to be the new
locomotives of growth in 2014, according to Nariman Behravesh,
chief economist at IHS.
The emerging economies, by contrast, are losing steam as a
commodities "super-cycle" - which has buoyed the likes of Brazil
and Russia - wanes and political uncertainties grow ahead of
2014 elections in Turkey, South Africa, India, Indonesia and
"Business leaders are generally feeling better about the
developed markets and the prospects for the next couple of years
but are worried about certain emerging markets, perhaps even to
the point of curtailing some investment," said Barry Salzberg,
global CEO of Deloitte Touche Tohmatsu.
Other issues keeping top managers awake at night include
concerns about fiscal deficits, increasing tax burdens, the
availability of talent to fill key jobs, exchange rate
volatility and unstable capital markets, the PwC survey found.
The prevailing business mood paints a improving picture for
job prospects, with half of CEOs interviewed worldwide expecting
to add to staff in 2014, versus 45 percent a year ago.
But that modest pick-up in hiring plans may not do much to
dent chronic unemployment levels in many countries.
Worldwide unemployment hit nearly 202 million in 2013, an
increase of some 5 million compared with a year earlier,
according to a report from the International Labour Organization