Study aired at World Economic Forum shows only 22% of British bosses confident, but those of emerging markets more positive
A flat-lining economy, the government’s austerity programme, red tape and a lack of skilled workers have made Britain’s business leaders less optimistic about the future than their counterparts abroad, according to a global survey of chief executives released in Davos on Tuesday.
The annual snapshot of the mood of boardrooms to mark the start of the annual World Economic Forum, held in the Swiss alpine town, found that only 22% of the people running UK companies were very confident about growth prospects over the next 12 months.
The survey by the consulting firm PWC showed that 36% of the chief executives sampled globally were upbeat about 2013, with the most upbeat being in the leading emerging-market countries.
PWC said its research showed that UK companies were planning to spend the next year cutting costs, improving efficiency, improving service to existing customers and concentrating on the domestic market.
Chief executives in the UK said the issues that gave them most concern included the coalition’s response to Britain’s budget deficit, uncertainty about growth prospects, and the lack of stability in financial markets. But they were also aware of risks to their business from a lack of skilled workers, the dearth of available finance, and high energy costs.
Ian Powell, UK chairman and senior partner at PWC, said: “As UK businesses ride out the current uncertain period, in which ‘more of the same’ is the expectation of many economists, the question is whether the actions being taken now will equip them to adapt, grow and seize future opportunities.”
The consultancy said chief executives in Russia had expressed the most confidence about the year ahead, with 62% appearing optimistic about strong growth. But more than half the business leaders in Mexico, India, the Middle East and Africa also said they were upbeat about their prospects in 2013.
Several countries, including Spain, Italy, Switzerland, Japan and France, registered even more pessimism than the UK.
The PWC survey comes after a two-year period that has left the level of UK national output virtually unchanged and still well below the level when the recession began in early 2008.
In the attempt to keep organisations “resilient”, UK chief executives, said PWC, were looking at a number of growth areas. Of the executives, 38% see opportunities for organic growth in the home market, with 24% citing new products or services. The countries favoured for overseas growth were the US, China, France and Germany.
Ministers are keen to see UK industry expand into fast-growing overseas markets as part of rebalancing the economy, but PWC said there was little sign of this. “Perhaps surprisingly, more UK CEOs are looking closer to home and expecting greater domestic growth as their key growth opportunity. Only 14% of UK CEOs are targeting organic growth in an existing foreign market [compared with 36% of German and 37% of French CEOs].”